Property division is one of the most complex divorce-related processes. The outcome of your property division dispute could impact your short and long-term financial stability, so it's important to stay on top of the process.
Today, we're giving you property division tips that will help you find the best path forward in your property division case.
Compile a List of Your Assets & Liabilities—& Start Early
During your property division case, the court will ask you to present a comprehensive list of all the personal and marital assets and liabilities you possess. Yes, all of them. From the family dog to the silverware set to the marital home, you'll need to have all of it on record. Omitting owned assets or liabilities from the property division process can have legal ramifications.
In other words, you've got a lot of documentation ahead of you. The sooner you start, the easier it will be to keep up with all of it and make sure you don't miss anything.
Additionally, keeping track of all your assets and liabilities will help you figure out if your ex tampers with any property during the divorce, which could net you a more favorable judgment from the court.
Bring a Professional on Board
Having a financial professional like a certified public account (CPA) by your side can make the property division process much easier to tackle. Ideally, you should make sure that whoever you hire specializes in asset valuation.
Understanding how much your assets and liabilities are really worth can be difficult—especially if you have assets that may have appreciated in value over time (like family heirlooms or antiques). Knowing how much your assets and liabilities are really worth can help you pursue a genuinely equitable judgment in your case.
Don't Forget About Next Year's Taxes
Tax season is probably the last thing you want to think about right now, but do it anyways. Your divorce can have a huge impact on what your taxes look like next year.
For example, if you keep the marital home, will you have to pay an estate tax? Can you do it alone? If you sell it, is there a capital gains tax you have to pay? Will the divorce move you into a lower or higher individual tax bracket? How will that affect you? Will your kids be your dependents, or your ex's?
Knowing the answer to those questions can help you budget for next year's taxes while resolving your divorce.
Don't Underestimate Post-Divorce Expenses
Many divorcees underestimate just how expensive life is post-divorce. You'll probably have to pay more in rent or mortgage than you did while married. You may have to pay more in taxes. You'll most likely need to buy new items, like furnishings, for your home. You may have to purchase a new vehicle. The list goes on.
You should consult an accountant to get a realistic idea of what your life will look like financially post-divorce. Then, start budgeting early. On that note, keep track of how you're planning to pay for post-divorce expenses. Paying for your new life with cash will look different than paying for it with an investment account you need to pay taxes on, for example.
At the Law & Mediation Firm of Klueck & Hoppes, APC, we help clients navigate the property division process.
To schedule a consultation with our firm, please contact us online or via phone at (619) 577-4900.