It is important to carefully review the property division determination portion of a divorce proceeding, particularly for high asset divorces.
A divorce signifies more than just the split of a personal partnership with another individual; it is also a financial split. All marital assets and liabilities are split between the couple, with each individual taking a portion. Although the end of a marriage is an emotional process, it is wise to look at the property division determination portion of the proceeding as logically as possible. Allowing emotions to guide these decisions can lead to costly mistakes.
Avoid costly mistakes with these three tips
The potential for costly mistakes is particularly true for high asset couples. Three important considerations that can help reduce the risk of costly mistakes include:
- Organize. It is wise to take the time to get paperwork in order. Whether gathering documents yourself or hiring a financial expert to review assets, make sure every asset and liability is accounted for before finalizing the property division determination portion of the divorce. Create an inventory of valuable assets. This can include real estate, automobiles, antiques, jewelry and art. Also create a list of savings and checking accounts, retirement assets, stocks, bonds and the like. There are also steps that can be taken if there is concern that a spouse is purposefully hiding some assets. This includes checking with the county assessor’s office to see if property has recently been gifted and hiring a forensic accountant to review financial records for fraud.
- Document. Certain assets require specific legal documentation to ensure the split is completed. This is particularly true with retirement assets. Retirement assets often require a Qualified Domestic Relations Order (QDRO) from the court in order for someone other than the listed account holder to receive payment.
- Tax. Take a moment to review the tax implications of a proposed split. Two areas to consider are taxes taken out on distributions of certain assets and alimony payments. Certain assets like real property can have tax ramifications. A mortgage, for example, can have both tax liabilities and benefits. Estimate these numbers before agreeing to the split. Also consider the alimony payment. When determining the payment, review which party is responsible for the tax obligations.
These are just a few of the issues to navigate when going through a divorce. As a result, it is wise for those who are going through the process to contact an experienced high-asset divorce attorney. This legal professional will help guide you through the process and advocate for your rights, working to better ensure your financial health after the divorce is complete.