When it comes to divorce, splitting assets is often challenging. Sharing marital assets equally can take a lot of debate and compromise. While you must remain fair, you must also ensure you receive your deserved portion.
Although every situation is different, there are some general steps you can take during the asset division process. Here are just a few.
Be reasonable when it comes to the house
There are lots of options when it comes to the family home. For example, you can have the home appraised to determine its value, then sell it and split the proceeds. If you wish to buy out your ex’s share and remain in the home, make sure you are accounting for all possible costs. The costs for owning a home are typically more challenging to cover with a single income. Do not keep the home just because of a sentimental attachment.
Keep taxes in mind
Even if two different assets seem to have the same value, taxes can actually cause a disparity. That is why all tax payments must factor in divorce negotiations. You and your ex will need to decide how to deal with tax issues to develop the best financial strategy. You may also need to supplement tax obligations by splitting other assets differently.
Have a plan for retirement accounts
A qualified domestic relations order (QDRO) can help avoid penalties on early withdrawals from a retirement account. While QDROs exist separately from the divorce agreement, they have a basis in the asset division process overall. The entity in charge of the retirement account must also receive a copy of the QDRO to determine whether it is feasible within the confines of the retirement account.
Divorce can change your financial outlook drastically, but proper planning will help you avoid major issues. You may even find that you are better off financially once you are on track again.