Ending a marriage is likely near the top of the list of emotionally challenging experiences. However, even more challenging is the fact that people are advised to put emotions aside and focus on untangling finances and assets. Those in the throes of a divorce in New Jersey may want to avoid talking about it, but important decisions that can determine long-term financial stability need to be made at this important time.
Keeping the family home may be the easier choice, but the upkeep costs may make it an option that is not affordable. Another easier option that may turn out to be costly is taking the home instead of more liquid assets. While it may seem a fair exchange, a house will cost much more than a retirement, a brokerage or a bank account in the long run.
Considering tax implications may seem like an unnecessary complication. If one spouse gets a $100,000 checking account, and the other gets a 401(k) plan of the same value, the tax can make a significant difference. Withdrawing funds from the 401(k) plan can only be accessed by paying tax — and possibly penalties — on any withdrawals while funds withdrawn from a checking account are can be accessed immediately. This underscores the need to analyze the tax implications of any offers in the property division process.
To make sure the necessary financial issues are addressed, it might be wise to retain the services of an experienced New Jersey divorce attorney. A lawyer can help with ensuring a qualified domestic relations order is obtained if the other spouse has a 401(k) plan, and he or she may also suggest life insurance is taken out on a spouse who has to pay spousal and child support. Paying attention to these important aspects of a divorce may lead to a financially stable post-divorce life.
Source: CNBC, “When it comes to divorce, not all assets are equal“, Sarah O’Brien, Accessed on Dec. 1, 2017