While couples seem to get together around New Year's Eve, divorce filings spike at the beginning of each year. Whether fueled by resolutions to end an unhappy marriage or simple convenience of waiting out the holidays, many couples choose to file for divorce around this time. However, there are many implications that divorce can have, including child custody, support, and property division matters.
Why You Should Be Concerned About Property Division
Filing for divorce is more complicated than just signing a paper. There must be deep consideration into the division of marital property, child custody, and support payments. One of the biggest assets a couple has is the family home. While it is oftentimes personal for one spouse to demand to keep the family home no matter what, there are serious challenges to doing so.
The family home requires significant money for paying taxes, utilities, general upkeep, and maintaining mortgage payments. In many cases, the spouse that fights for the family home may not realize that they have to financially support the home as well. These considerations are in addition to many of the other tax consequences that occur when a couple divides their assets, such as:
- Appreciation amounts that are exempted from taxes
- Costs basis of certain stocks and mutual funds
- Limited partnerships
- Tax brackets
- Lock-up periods
- Social Security implications
In order to avoid a complicated tax scenario, it is best for a couple to pay off marital debts, such as credit cards, and close joint accounts as soon as possible. From that point, it is easier to have a comprehensive look at the property that must be divided and the financial implications associated with each asset. By working with a professional, you can ensure that assets are handled as efficiently as possible to ensure maximum profits for each spouse at the outcome of the divorce.
