Various legal issues that divorcing couples have to address can add a lot of stress to the divorce process, which may ultimately also result in a heated battle. Among the various issues, property division is one that may be the most difficult. As a result, many separating spouses tend to overlook some important assets during such times.
The assets that a separating spouse needs to claim during the divorce largely depend on the financial situation of that spouse during the time of the divorce as well as what is expected in the future. For example, if a separating spouse needs liquid cash immediately after the divorce, stocks, bonds and mutual funds are a good option. If that spouse does not immediately need liquid cash, a combination of assets with various degrees of liquidity may be a good long-term option.
Separating couples may also want to see that all jointly held assets are transferred into one person's name after the divorce. For example, divorcing spouses can separate their bank accounts and make sure that the home mortgage, if any, is transferred to the spouse who agrees to take it over. However, it is also important for divorcing spouses to keep in mind the tax implications of the assets that they plan to keep after the divorce. For example, Roth IRAs and Roth 401(k) account are tax-exempt but traditional IRAs and 401(k) plans can have tax implications.
It is also essential to review the tax filings from the last few years when the separating spouses may have filed tax returns as a married couple. If there are any tax assets, it may be a useful tool for trimming taxes in the coming years. A retirement account is another important asset that divorcing spouses should keep in mind at the time of property division. This is important because, in many cases, retirement accounts form a large percentage of the married couple's net worth. However, the transfers must be done carefully.
Finally, Virginia couples should remember that nowadays, digital assets are an important part of a marriage and; therefore, separating them at the time of the divorce becomes necessary. Since many of the necessary tasks may seem extremely complicated, it may help separating spouses if they choose to retain an experienced family law attorney.
Source: Forbes, "6 Money Matters Divorcing Spouses Often Overlook," Leslie Thompson, Aug. 19, 2014