One of the most important aspects of a divorce is the division of any marital property. A mistake in that area isn’t just problematic — it can spell disaster for your financial future.
If you’re about to enter negotiations with your spouse regarding the division of your joint assets, there are several different things you need to keep in mind:
You may think you know what an asset is worth, whether that’s your home, a car or a collection of art — but you don’t really know their fair market value without an appraisal. An appraisal can keep you from bargaining away your interests and cheating yourself based on the wrong ideas.
Tax issues can have a significant impact on how much you actually net once assets are divided. Sometimes, such as if you’re selling stocks, the tax you pay is on the profits. Short-term capital gains, long-term capital gains and all the relevant tax laws (which are constantly in flux) need to be considered when deciding on a settlement. It often takes guidance from a financial advisor to fully understand how taxes may work as the assets are divided.
The older you are when you divorce, the harder it may be for you to rebuild your retirement fund. Understand what you may be entitled to protect and keep in your divorce is critical.
When you’re looking at the assets you have to divide, you may quickly realize that there’s a lot to think about. Working closely with your divorce team can help you to learn more about how options can impact your future. You can use that information to formulate your plan for the property division.