Going through a divorce generally requires you and your spouse to divide all the assets and liabilities that that exist when either one of you files for divorce. Property division (distribution of the marital estate) is a major undertaking, especially if you have considerable assets.
It is critical for you to consider several important questions before you go through the property division process. Answering the following questions will proactively help you to make decisions that are in your best interests.
What happens to the marital home?
There are a few options for dealing with the marital home. Some people may sell the home, pay off mortgage and marital debts and split anything that is left. Another option is for one spouse to buy out the other through a refinance, assumption or cash-out via another asset.
How are retirement accounts handled?
If both spouses have retirement accounts that are of equal value, they may each retain their own accounts in the divorce. If that is not the case, then a division of some of the accounts is required. The division is completed through a transfer incident to divorce or a qualified domestic relations order. Without the proper transferring order/documentation, either or both parties may incur tax consequences that are otherwise avoidable.
Will property division affect your credit?
If there are marital debts, those must still be paid. Creditors do not have to abide by the property division order because they are not parties to the case. Unless all joint debts are paid off at the time of the divorce, there is a chance your credit can be impacted if your ex does not pay the debts he/she is ordered to pay.
Property division matters are often very complex. Therefore, you should work with Smith Legal LLC, a firm familiar with property division of all types of assets and debts and who can guide you through every step of the process. Smith Legal LLC will walk you through every possible option from a logical perspective so you can make decisions that are in your best financial interest.