When a couple decides that divorce is the best option for their future, they must proceed through a complex process punctuated by numerous compromises and negotiations. From child custody and a parenting time schedule to financial support and property division, the divorcing couple must navigate many discussions before embarking on their exciting new futures.
For many couples, the division of property and debt responsibility represents a significant barrier in the divorce process. Property division can be complicated by both financial and emotional factors and is often derailed by flawed logic. While every divorce is unique, there are some common tips that couples can follow to ensure an efficient divorce process, including:
- Do not assume a rigid value in assets: Property division isn’t always about selling an asset and splitting the profit. Often, couples choose to find an equitable division based on value. For example, “You take the car and I take the art collection.” Or “You take the house and I’ll take the retirement fund.” These might be simplistic examples, but they serve to illustrate the point. It is wise, however, to consider future value and ancillary costs when reaching these agreements. An asset rarely maintains the same value year over year. The asset might increase in value, depreciate or contain unexpected tax ramifications that the couple must consider when negotiating the split.
- Do not attempt to hide or devalue assets: For some individuals, the temptation to hide or devalue assets can become overwhelming. If the court discovers this fraud, however, it can lead to significant consequences both through the process of property division and in potential criminal charges.
- Do not assume you must sell the house right now: For couples who wish to make a clean financial break and start their independent futures as soon as possible, the notion of holding on to the family home might seem counter intuitive. It is wise, however, to carefully examine the market and explore various questions. If the market is trending upward, will you turn a greater profit by waiting for another six months? Are there simple renovations you can make that would dramatically increase the value of the property? Many couples will simply choose to sell the home immediately and split the profits. In certain situations, however, you could make a significant amount more due to a strategic delay.
When navigating the divorce process, the couple must negotiate several compromises geared toward the stability of their financial future. There are numerous traps the divorcing couple can fall into, however, that could undermine their goals.