If you're like most people with a divorce looming in their future, you're probably experiencing a mixture of anxiety and relief — and it's only normal to feel strong emotions during this time. However, it's important to keep in mind that divorce isn't just about ending a marital relationship, but it's also about setting the stage for your financial future. At the heart of the issue, you'll find the legal concept of "equitable distribution" or "community property" depending on your jurisdiction. Equitable distribution doesn't necessarily mean an equal split, but rather a fair one, while community property law treats all assets acquired during the marriage as equally owned by both spouses.
Familiarizing yourself with these concepts will pave the way to better understanding your options. Here's what you need to know:
The Significance of Marital and Separate Property
When considering the division of assets, you need to grasp the distinction between marital and separate property. Marital property typically includes assets acquired during the marriage, irrespective of whose name is on the title. On the other hand, separate property refers to assets that you or your spouse owned individually before the marriage and specific assets received during the marriage, such as gifts or inheritances. While separate property remains with the original owner after divorce, marital property is what's subject to division.
Assessing the Value of Assets
Before proceeding with the division of assets, it's vital to obtain an accurate valuation of your marital property. This could involve real estate appraisals, business valuations, or assessments of personal property like vehicles or jewelry. It's essential to have a clear financial picture to ensure the division of assets is fair and equitable. You may want to consult with financial professionals who specialize in divorce proceedings for this purpose.
Negotiating Asset Division
Asset division isn't necessarily a one-size-fits-all process. There's room for negotiation, which gives you the chance to prioritize what matters most to you. You might be less interested in the family home but keen to keep a retirement account, for example. Strive to maintain an open line of communication with your spouse, even if it's through your attorneys.
Considering the Tax Implications
Assets come with tax implications, and these should be factored into your negotiation strategy. Certain assets may appear equal in value on paper but could result in different net values after taxes. Remember, retirement accounts, capital gains on property, and even alimony payments can carry tax consequences.
Seeking Legal Guidance
Lastly, seek the advice of a local divorce settlement attorney to guide you through this complex process. They can provide invaluable counsel, represent your interests, and help ensure that the division of assets is done in the most equitable manner.