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4 crucial stages in property division

On Behalf of | Nov 23, 2020 | Property Division |

Based on the complexity of a couple’s assets and debts, property division can quickly become a challenging part of even the most amicable divorce. Acrimony, hurt feelings and hidden assets can further complicate the process. When a divorcing couple must divide complex assets such as a family business, retirement funds or vacation properties, the financial division can be derailed by heated debates.

No matter the length of the marriage or the complexity of your assets here are four issues that you and your spouse will have to work through during divorce.

  • Identifying assets and debts: The couple can start by listing assets and debts to help clarify things for later stages. It might be wise to start with the biggest assets like a home, vacation property or business and work down to a list of digital assets such as an online movie collection. With a comprehensive list, the divorcing couple can move to the next phase.
  • Identifying marital property: The difference between marital and non-marital assets is a crucial one. Assets that one party owned prior to the marriage, were specifically gifted or were specifically inherited are generally considered non-marital and are not subject to division in divorce.
  • Assigning a value to each asset: This could be as simple as looking up what an item is selling for to as complex as hiring a professional business valuation firm, but each asset must be assigned a dollar figure.
  • Dividing the assets: For something that sounds straightforward, it is a complex process. Many items such as a house, a car or a business can simply be sold with the profits being split. Other assets, though, might have complicating factors. A couple might choose to split a retirement fund, for example. This could result in tax consequences such as a penalty for early withdrawal which might cause the couple to lose a significant portion of the asset.

The division of assets, the division of debts, child support, spousal support and custody must all be examined together. All these elements work together to inform the future financial stability of both parties.

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