One of the great myths about property division is that financial assets are simply “pots of money” that can somehow be divided right down the middle. In some cases that is possible, but in many other cases the ability to reach a “fair” division of the assets is difficult. There are plenty of rules and laws that apply to the division of financial property in a divorce, and many of these rules — and even the tax implications — can change how an asset is divided, or if a spouse even wants to fight for the asset in the first place.
So what can a divorcing couple do to prepare themselves for the often-difficult task of property division?
It all begins, as most things do in divorce, with gathering and organizing. You need to know exactly what kind of assets you hold and what kind of assets your soon-to-be-ex holds. Look over all of your bank accounts, pensions, 401(K) plans, other investment and retirement plans, and even any debts that you or your spouse may have.
Once you know what’s “on the table,” so to speak, then you can go about planning what assets must be adequately and fairly divided. In this regard, it is absolutely vital to have an experienced family law attorney on your side to help you work through the tax implications and financial rules that apply to the assets you are negotiating over.
In the end, whatever type of agreement you and your spouse reach, you need to make sure that you and your spouse follow through with that agreement. Again, your attorney can help you stay on track with this task, as well as advise you should your soon-to-be-ex fail to keep up.
Source: Wall Street Journal, “If Divorcing, Divide Investments With Care,” Lisa Ward, April 6, 2014