Property division concepts and tips
Every aspect of the divorce process plays a role in developing the final settlement, but some components have a more significant effect than others. The fair and reasonable division of property is crucial to reaching a divorce settlement that meets the needs of both parties. That is why it is often in people’s best interests to keep a few key points in mind when considering how best to divide their assets.
Given that debts, as well as assets, are distributed between parties at the time of divorce, it’s important that they are properly identified and divided. Transferring loans to the appropriate spouse and/or paying off debts entirely is recommended before the divorce settlement is finalized, and people are encouraged to refinance any mortgages if necessary.
After people have addressed concerns regarding their financial liabilities, they can begin to consider their various assets. One of the first things to think about is whether or not it is more helpful to negotiate for assets with immediate liquid value or long-term value. The decision to seek one form of asset over another can depend on a person’s current financial situation.
Tax assets apply to future filings and often exist in the form of charitable contribution credits and/or capital loss credits. Dividing tax assets can eliminate potential tax-related issues in the future. Taxes should also be considered in how they impact the value of assets like Roth IRA and traditional 401(k) accounts. Understanding when and how taxes apply to investments can help to determine their real value during the division process.
An experienced attorney can serve as a wonderful resource for learning about all of the factors that play a role in property division. Anyone with questions or concerns about different types of assets and their values can speak with an attorney.