Financial Equity…What You Need To Know

February 24, 2020
Jackie Porter

Article written by Jackie Porter

You are still reeling from the news that your spouse wants a divorce. That pain of this reality has barely settled in and now you are hit with a new blow: Correspondence for your spouse’s lawyer with the official divorce notice. Your mind is racing with questions. You never talked about money during the marriage and your partner earned the lions share of the income. You’re not quite sure what financial equity is.

What do you do now? And will you be entitled to enough funds from the marriage to continue to support yourself and your children?

It’s a lot to process, so now is the time to contact a lawyer to discuss how you can create as much financial equity in your divorce.

What is financial equity?

Financial equity is totaling assets created during the marriage, and dividing them equitably during a divorce. Assets created during a marriage include equity in a home, investments accumulated during the marriage, savings in bank accounts etc. These assets do not include the child or spousal support payments.

Are debts divided equally as well?

If the debt was contractually taken out by both parties, both spouses would be responsible for the debt in the eyes of the creditor. This fact is irrespective of any court or informal agreements you make with your former partner to equalize the debt payments. As far as the creditor is concerned, if you are paying your share of the loan and your ex does not live up to their responsibilities, the creditor can still pursue you both for the balance of the loan.

On the other hand, individual loans are the responsibility of the owner, even if you and your ex have made plans to pay off the debts as per your divorce agreement.

Are some assets more complicated to divide than others?

Deciding how to divide the matrimonial home can be complicated. Especially if you moved into a home your spouse owned prior to your marriage.


For many couples, a house is normally considered one of the largest assets the couple will divide. Figuring out how this asset will be split, and determining whether to sell now or after divorce can be a contentious issue for both parties.

How do I determine what assets are available to divide?

You will need to prepare a statement of net worth so that your lawyer can help you determine what you’re entitled to. First, you will need to list the assets you own. Then you will need to add up the balances of debts, (including mortgage debts) you jointly owe. In order to calculate your family net worth, subtract your assets from the debt balances.  If you are having trouble understanding the family’s financial documents, you will need to calculate your family’s net worth. Consider enlisting the services of a financial organizer to help you.

Why you deserve financial equity

Often in a divorce, one party will be reluctant to pursue assets they are entitled to in a divorce. Drawn out battles on entitlements to property, spousal and child support payments can take a toll on the spouse who is grieving the relationship and worried about how the drama of divorce is affecting the children.


Now more than ever, you will need the emotional support of close friends, family and even a professional therapist to help you as you move through the divorce journey.

Financially speaking, a divorce can lead to a very dramatic change in lifestyle, for yourself and your children, especially if you we’re not the main breadwinner. Consider enlisting the services of a certified financial planner who specializes in divorce so they can help you calculate the long-term financial costs of your settlement, and steps you can take to financially thrive after a divorce.

When should I discuss financial equity with a future partner?

Discussing finances with a prospective partner is important. Keep in mind many relationships fall apart when money is not discussed until it’s too late. Unfortunately, love does not conquer all in a relationship, and thinking through how you will advocate for yourself and your family in a new relationship will be essential in rebuilding financial security. Consider prenups, postnups and cohabit agreements.