Heading into a divorce in Connecticut without a good understanding of assets and liabilities in the marriage could place a spouse at a serious disadvantage. It may be wise to take time to evaluate one’s most immediate needs at the outset so that during discussions about the division of property, attention can be placed on seeking those assets that best facilitate a smoother transition into a separate life.
If the availability of cash is a pressing need during this transition, attention may be better focused on seeking assets that can be liquidated. These may include stocks, mutual funds or even some types of retirement accounts. As retirement assets are considered, it is also important to think about the tax implications because some accounts are funded with finances that haven’t yet been taxed. In the case of a Roth IRA, funds have already been taxed. In considering taxes, it is also wise to review the last few years of returns to explore issues that may provide a financial advantage, such as loss carryforwards. This is also a helpful way to identify undisclosed assets that may need to be considered.
Liabilities can be a serious issue if not addressed carefully during divorce proceedings. A lender is not obligated to honor a property division agreement related to a jointly-held liability. Major debts such as a mortgage may require a refinance, and other joint accounts should be cancelled. Another asset category to consider is digital properties such as social media accounts, music and other online holdings.
It may be difficult to know which issues to evaluate first, making it helpful to consider working with a lawyer from the beginning of the process. An experienced lawyer may effectively guide the process to ensure that all financial issues are included in the preliminary efforts to forge an agreeable divorce settlement.
Source: Forbes, “6 Money Matters Divorcing Spouses Often Overlook“, Leslie Thompson, August 19, 2014
Source: Forbes, “6 Money Matters Divorcing Spouses Often Overlook“, Leslie Thompson, August 19, 2014
