Not All Marital Assets are Created Equal During Divorce

If you are going through a #divorce, it may seem like getting it over with as quickly as possible is the best possible strategy. And while avoiding a protracted battle is a pretty good strategy whenever possible, it is also important not to rush the process. After all, once the final paperwork is signed by the court, there are few things you can change after the fact.

One area that often provides regrets is dividing up the marital assets. Whether fueled by emotion or lack of knowledge, many divorcing spouses end up with property that doesn’t deliver the expected value after the divorce is over.

Keeping the marital home – While emotionally, maintaining continuity by living in the marital home during and after the divorce may sound appealing (especially if you have children), this is often a mistake. What occurs many times is that the spouse who kept the home belatedly realizes that the upkeep costs are too much to bear, putting them in an unsustainable financial position.

Also, if you accept the home in lieu of liquid assets (like savings accounts or retirement assets), you may find out later that you weren’t comparing apples to apples. After all, a retirement account doesn’t come with upkeep costs.

Forgetting about taxes – On paper, a split of assets might look equal. But if you haven’t considered the tax implications of your share, then nothing is as it seems. For example, if you receive a retirement account but your ex takes the bank savings account, only one of you will be paying penalties and income tax on any withdrawals. And that would be you.

Not insuring your ex – If your ex has a support obligation to you as a result of the divorce, one thing you want to ensure is that there is an appropriate life insurance policy – with you as the owner and beneficiary – in place to protect your future interests. Should something unfortunate happen to your ex, you will want the security of knowing your support flow won’t unexpectedly terminate.

Going through a divorce can lead to financial uncertainty and concern. Visit our website to learn how a Divorce Transitional Support Advisor can help you or your client regain financial stability after a divorce.