Help a Reader: Splitting Up Assets

Lots of thoughts for the woman who made a ton less than her husband but still had to contribute 50% of all the expenses. Here's a comment that was left that also deals with how couples should split up finances:

My partner and I split our bills based on the ratio of what we contribute to our total income. She makes 40% and I make 60% of our total income. Therefore, she pays 40% of the bills and I pay 60%. While we both feel we have 50/50 ownership of assets, we disagree on how we should liquidate assets we have purchased together. I say that I should get 60% because that is what I contributed and she says it should 50/50. She will always gain 10% and I will always lose 10% of what we originally paid.

Personally, I'd say that if an asset is sold, the proceeds should be split according to the percentages each person put in to buy it in the first place. What do you say?

Comments

[Kevin M]

Good plan, but try proving that in court.

[Strick]

Sounds like something for a divorce attorney and judge to decide.

[Jay m.]

Running your marriage like a business - no wonder you are calling it quits. I am always amazed when I hear of couples who operate this way, to me its an absolute lack of committment. You should always do what you can to contribute regardless of percentages. It seems it was always mine or theirs, and never ours. Keeping things separate like that is a self fulfilling prophecy that you both knew things wouldn't last. Do yourself a favor, get therapy before your next relationship. Walk away with 50 percent and be happy for your partner. Material things can alwaysbe replaced. If you really had feeling for each other this wouldn't be an issue.

[Angie]

Is that extra 10% worth all the fighting? I think you are being way too particular with all this. You must be holding something against her in order to get every extra penny. I'm pretty sure she didn't call it quits just so she could steal that extra 10% of assets.

If you had paid some of her loans as monthly bills when you were together, would you ask for all those payments back?

[Michael]

I've never understood the split finances very well. When my wife and I got married, it was both of our intentions that everything was just 'ours'. We kind of put each other through school and were both the main income earner at one point or another, but never did either of us express any sentiments of "hey, you're not pulling your weight".

We both feel that if we don't pay the bills or whatever that we both lose out. Any money earned is also both of ours to spend (and save!), although we coordinate what to do with it frequently.

[Jim]

It doesn't say anything about divorce or splitting up. In fact it doesn't even say they are married exactly. So the liquidation of an asset may just mean they're selling a house they've shared.

While I personally think combined finances are best for a marriage that may not work well for everyone. If the couple has very different money habits and one is very irresponsible then it may be best for the health of the marriage to keep finances separate to some degree.

If money is separate with a 40/60 split then assets should be separate too. If its 'fair' to only contribute 40% then its equally fair to only get 40% back. So my opinion is to either keep the 40/60 split for everything.

Jim

[unconstructed]

This post will somewhat eliminate the sexism; I assume with the PARTNER term being used ...

50/50 expense equals 50/50 assets.
40/60 expense equals 40/60 assets.

The partners sense of entitlement to 50% even though the partner only contributes 40% is a real cause for counseling. It is completely alright as long as she is getting over ... her extra 10% return and you are sacrificing your 10%? How is this OK; but your want for a 50/50 split a horrible thing?

Since when has the want for fairness been a sign of greed and a negative trait?!?!?

Is the concept of socailism appropriate in a relationship?

[JimL]

If this is a marriage, then everything should be in one pot. There is no "mine and yours". What you "put in" and "get out" mean nothing. If this is more of a partership, such as living together for convenience, then it should be run just like a business. Basically, you own the same percentage as what you invested. If you put up 60%, you should get 60% of the value upon disposal.

[Tim]

i'd jello wrestle for each asset sold.

[Anonymous]

I love my wife, and we have chosen to walk through this world together. Everything we have is ours. I make a lot more money than she does, but she brings far more riches to my life than my salary ever could. Why on earth we would waste moments of our lives determining who contributes what and paying bills in percentages by earnings is completely beyond me, not to mention it would be fantastically financially inefficient.

[Sarah]

Yeah, capitalism is what we need in marriages. If a spouse underperforms or times are tough, out the door he goes!

Here's a hint, unconstructed: economic analysis is not the appropriate tool for every situation. Try it out some time.

[Frank]

I like how in the other post people were appalled that the husband would ask his wife who earns 1/4 of what he earns to contribute 50%.

But here, where the man contributes more, now all of a sudden it is ok that his wife expects more then she put in back? Greedy.

Double standards much?

[Austin]

In terms of fairness, I would have to agree with FMF’s answer that the assets should be split according to the percentages contributed. Nevertheless, without additional information about the type of relationship(marriage, domestic partnership, etc.) and other details, it’s hard to say what is the best course of action. Legal action should always be of last resort. Counseling may be useful but this person and the partner should concentrate on working together on these issues. Therefore, I think a good course of action would be to have an informal chat with the partner and draw out what their relationship looks like in terms of finances. I’m not talking about a financial plan or contract, but just a simple description and maybe diagrams to make sure both people fully understand the situation.

[Forex trading systems]

Commenter on the top is absolutely right: it is lack of committment and everything must be ours, not mine or yours. If we lived like Bible says so that man will become one flesh with his wife, we'd never faced such problems. In marriage there is no "me" or "you", there is only WE. In all senses.

[vmk]

JimL has hit the nail on the head. Marriage isn't a business it's an emotional commitment. If this is simply a couple living together then it should be run like a business, you get out what you put in.

[Sarah K.]

I'm assuming that this is NOT liquidation due to breakup or divorce, just selling things in the normal course of a marriage/relationship. Here's what my partner and I do:

There are three pots of money, yours, mine and ours. We contribute from our paychecks to the "ours" pot relative to our incomes (right now about 40/60). All the "ours" expenses comes out of that pot (a joint checking account).

If we sell something, or get an unexpected windfall, it goes in the "ours" pot, and is used for "our" stuff (taking a vacation, paying down debt, Christmas gifts to our family and friends, buying an appliance for the house, special dinner out, etc.).

This has worked wonderfully well for us. If something is borderline "ours" vs. "yours" or "mine," we discuss it and decide together -- usually takes about 30 seconds per item or less.

[FMF]

All --

For the record, I was approaching this issue from the feeling that these two people were NOT married -- that they were just living together (now that I re-read it, I see that this can be taken either way, though the word "partner" is used versus "spouse", so hence my assumption.) And I don't think there's a split up/divorce here -- just a disagreement on how to divide the proceeds from an asset being sold.

As such, I gave the advice I did -- that the assets should be split based on who contributed to it. If these people were married, my advice would be that everything is 50/50.

Just wanted to make those issues clear.

[PA Mom]

If you're TRULY partners, you should have combined assets/funds. All the money goes into joint account(s), you decide on what you want to buy together, and you decide on what you want to get rid of together. If something is sold, the money goes back into the joint account.

Splitting assets should only come up if the partnership is splitting up. Looks to me like you're already acting as if you're not a partnership. Maybe one (or both?) of you isn't fully committed to this relationship?

I've been in a relationship for 20 years now, 16 years of that has been marriage. We combined our accounts when we got married. Percentage of anything never comes up in discussions between me and my husband. No matter who is working what job at the time, it's all OUR money. Our discussions are based on: Do we really want/need this? Can we afford it? Is it a reasonable price? Is it being used or causing clutter? Should we get rid of it? If so, should we sell it, give it away on Freecycle, or donate it to charity?

[Pete]

I've always believed that there should be two separate spheres in life: family and business. Treating your family like a business and treating a business like family inevitably leads to disaster.

I agree with PA Mom. When you get married, you are creating a family. At that point any thoughts of contributions and dividing assets just destroys everything.

That said, if they are not married, splitting by contribution is the only fair solution.

[Andy]

I think in a typical relationship, there's more than just money to consider. Especially if children are involved, the person who makes less money is usually in a position to contribute more in other ways in the home. Even in a traditional marriage, I would not find it fair if one person does most of the work while the other takes it easy. For that reason, I think that 40/60 income doesn't make a difference. You should contribute 50/50 to the relationship (in whatever manner you can) and you each reap equal benefits. So in response to Frank, I don't think it's a double standard to support unequal (monetary) earnings and still support equal distribution of monetary rewards because they are different measurements.

[Ivy]

We always went with the mine/yours/ours system. We each put an equal percentage (let's say 75%)of our wages into the ours account and did whatever we wanted with the rest. This way each of us has contributed an equal percentage of labor, and thusly consider ourselves 50/50 partners in the investments. This allows each partner to also have private money - no comments about how many pairs of shoes are purchased :-)

[Robert in SF]

It's often said that the number one reason for divorce is problems between spouses about money. I think it's human nature to equate money with all the things it represents, such as power, freedom, security, commitment. So when there's a disparity in income, spending, and maintenance of assets, then the emotional feelings come out, because the "lower contributing party" is not as invested, or free, or secure, or committed...however the emotional lines are drawn for the individuals.

By the way, I find it funny that no one is telling the wife to not worry about the measly 10% difference and just let the husband have it to keep the marriage happy. It's always the man who has to 'settle'.

If you contribute to the purchase by a certain split, you should reap from the sale the same split...

There are caveats...who contributed to the maintenance of the asset in such a way to invest their time, effort, energy, etc. to keep the asset worth the sale price? If it was grossly one sided, that can alter the split from the initial purchase...

Just something to think about.