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Divorce and protection of assets

On Behalf of | Jan 21, 2016 | Divorce

Although money issues can be among the top challenges leading to the end of a marriage, the problems can become even worse during and after the divorce process, especially if the parties going through the situation are not attentive to certain potential pitfalls. California couples should pay attention to their financial affairs as they enter a divorce in order to avoid costly mistakes that could affect them both right away as well as years later.

Dividing marital property should be based on a full awareness of the assets involved. In many cases, spouses are not completely truthful about bank accounts or incomes. An individual could fall short of the amount due in a divorce settlement because of such hidden information. An investigator could be helpful in verifying the existence and value of any such assets. It is also possible to miss out on the full value of a settlement by being unaware of the tax treatment of a given asset. The tax basis of an asset should be computed to ensure that the true value of such an asset is used in negotiating a settlement.

An individual could create negative financial consequences by taking retirement funds out to pay mutual debts or to settle with an ex-spouse. It may be better to find another avenue for paying these obligations. It is also important to realize that mutual assets and accounts could be misused by one party to lash out at the other. Dropping a spouse from a shared account at the outset of a divorce may help to minimize these problems.

With more complicated financial matters, a person who is facing a divorce might want to have the assistance of a family law attorney and a financial adviser. This may ensure that serious money errors are not made during the property division phase of the process.