A couple can accumulate a substantial portfolio of assets during the course of a marriage, which must be valued and divided upon the marriage’s end. And while the property division process can be fairly straightforward in many cases, countless couples across the state of Illinois and beyond are confronted with serious issues over the fair division of assets. Here are a few factors and suggestions individuals should keep in mind as they approach their divorce to ensure that it is not only equal but fair too.
Plan it out
Before anyone proceeded to approach the issue of property division it’s important that he or she understands their family’s financial situation and investments. The first step should be to obtain the legal counsel of an experienced divorce attorney and perhaps a CPA to help navigate the process of identifying and dividing assets. After that, it’s helpful to review everything from the household monthly bills to the mortgage payment to IRA accounts and identify liquid and illiquid assets, which can help to distinguish the difference between the couple’s net worth and practical worth.
Be realistic about goals
While the idea of dividing assets equally seems straightforward enough, other factors like taxes and liquidity come into play when determining the real value of property. For instance, the family house can represent a significant portion of a couple’s shared assets, but can present unique challenges for the party that retains ownership of it after the divorce. In exchange for the house, the other spouse may be granted anything from the couple’s savings accounts to their retirement funds, which translates into usable money, while the homeowner is left with ongoing expenses.
Ensuring that property is divided in a way that accounts for liquid and illiquid assets goes a long way to achieving fair results.
Source: Wall Street Journal, “The Biggest Financial Mistakes Divorcing Couples Make,” April 24, 2014