Avoiding mistakes with assets in divorce

Many Pennsylvanians who want divorces make the mistake of rushing to file without first getting a full picture of both their finances and those of their spouses. When people make this mistake, they may end up with costly financial repercussions later on.

Before filing, it is a good idea for people to meet with professionals, such as accountants and financial advisers. They should also identify and inventory all assets, accounts and liabilities of both themselves and their spouses. This can help them to avoid missing money and assets that would otherwise have been divided in their property settlement.

They should also make certain they understand the tax basis for various assets, as some may be subjected to significant capital gains taxes after the transfer, making them far less valuable than they appear to be on paper. A person may also want to open a separate bank account to prevent problems. Getting assets appraised will help to avoid the tendency people have of overvaluing their assets. If people are able to close joint credit card accounts, they should do so. After the divorce, it is also important that a spouse who receives proceeds from the other’s retirement account try to avoid taking it as a distribution. They should rather try to roll it over to keep it towards funding their own retirement.

By taking steps to protect their assets, people may be able to avoid many of the financial pitfalls that may happen with a divorce. Having a good picture of what constitutes marital property can also lead to better judgment with negotiated settlements. A family law attorney can often be of assistance in preparing an agreement that covers the division of property and other applicable issues.

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