For most people, getting divorced is a time of fear, anxiety and uncertainty. And a lot of these rough feelings have to do with concern about financial well-being after the divorce is over.
So if you are contemplating a divorce, what steps can you take to preserve the assets you’ve both worked so hard to accumulate and enhance during your marriage?
- Research your options and select a divorce attorney with a commitment to settlement. Although it can be very satisfying to think about “beating” your spouse in court, litigation is extremely expensive and the remedies that a court can utilize are finite and inflexible. On the other hand, non-court based (or alternative) approaches and solutions, including negotiation, mediation and the Collaborative process are more constructive and are limited only by the creativity and thoughtfulness of the divorcing spouses and the professionals they hire to help them. And in the less-expensive settlement processes, the divorcing couple can keep more of their money in their own pockets and out of the pockets of their divorce attorneys.
- Identify solutions that address both your interests and those of your spouse. If your husband is deeply attached to the home you’ve shared for 20 years, consider a package that lets him keep the house while you lay claim to more of the investment or retirement dollars. If your wife wants to keep control of the jointly-run small business, consider agreeing in exchange to a schedule of buy-out payments which will give you the financial security over a period of years so that you can implement a career change. Any “loss” for you can be turned into an advantage with enough flexibility and creativity.
- Look for the unique aspects of different asset categories. Some assets, such as most stock options, are not transferrable from the owner to a spouse. So you may want to hire an expert to place a value on the options, and put an asset of comparable value in the non-owner spouse’s column. A piece of real estate may come with significant maintenance headaches and costs which may make it less desirable to you or your spouse. Some assets generally increase in value over time, while others, such as automobiles, generally decrease in value over time. Think through the attendant characteristics of each asset as you weigh whether it is in your long-term best interests to retain it.
- Plan to maximize the tax advantages of your settlement. There are a myriad of different ways in which tax attributes need to be carefully considered in crafting a settlement package, from the differing tax attributes of alimony and child support, to the hidden tax costs embedded in retirement accounts and real estate. Be sure that you retain knowledgeable experts who will ensure that all of the relevant tax considerations are considered and taken into account.
Do you have questions on how to constructively divide assets in your divorce? At Feldesman Tucker, we know that divorce affects essential aspects of our clients’ lives, including financial matters. We are committed to helping our clients achieve the best possible outcome so they can move forward successfully after divorce. For more information on how you can divide your assets without destroying them, contact our Bethesda, Maryland, Virginia or Washington D.C office to schedule a consultation.