What is the difference between “income” and “assets” in a divorce proceeding?

WHAT IS THE DIFFERENCE BETWEEN “INCOME” AND “ASSETS” IN A DIVORCE? That’s a damn good question. When I first got asked that question, it brought back my accounting days in frenzy and I began to over-think the answer to include all sorts of variables: Income (passive, ordinary), Assets (real vs financial), Expenses, Liabilities, tangible vs. intangible….
But it’s not all that. With regard to figuring out what is what in a divorce, just remember that “income” goes to child support and spousal support and is coming out of the “liquid” pot. So your salary from a job is usually income. Certain types of benefits (veteran’s, social security, interest from stocks and bonds) things like that are going to be in the income pot and will be used to determine your level of financial responsibility towards children and former spouse. It is “incoming” funds of a more liquid nature that are considered “income” for purposes of a divorce.
Assets are usually split according to a community property or equitable distribution scheme and these would be things like real estate, expensive jewelry, copyrights/trademarks, GOLD, stamp collections, companies, bonuses, lottery winnings, stocks, bonds, trust funds and other indices of “wealth” that may not be so liquid, like “appreciation,” “goodwill” and “stake.”
The more assets you have, the more expensive it’s going to be to distribute from a legal perspective (because the parties are usually going to fight more aggressively than if there were no assets).
For the very wealthy, income is almost always irrelevant. People are usually more concerned about the assets. But for the middle class and indigent, it’s all about the income because that child support or alimony check could make the difference between survival and homelessness.
That’s basically it in a nutshell.
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