Property division is an important part of any divorce process, whether you and your spouse have come to an amicable agreement or if you are litigating your case in court. What Goes Into The Property Division Process?Some aspects of the marriage that are taken into consideration when dividing property include: Familiarize Yourself With Your Finances Before You SplitNormally, one person in a household manages the finances. However, this arrangement can create a “power imbalance when it comes time to negotiate settlements.” Consider Mediating Your DivorceIt’s no secret that divorce can be expensive. In fact, the average cost of legal fees in a divorce is $15,000. One way to cut down on these expenses is to use a mediator. A mediator doesn’t work on behalf of any one party, just facilitates agreements. If you want to keep your divorce details behind closed doors while cutting costs, a mediator might be the best bet for both you and your bank account. When you call Ascent Law, we will help you work with mediation to save costs on your divorce. Don’t Forget About Beneficiary DesignationsDivorce attorneys note that many clients fail to remove former spouses from their beneficiary designations. If you fail to remove these designations, “those amounts may end up being paid out to a former spouse.” “Usually that’s not the result you want.” For best results, handle beneficiary designations and other tedious paperwork as soon as possible. Consider Your Income Before Asking for All the Deductible Items“If you file single and make more than $380,750, your personal exemption of $4,000 is not available.” In light of this fact, individuals might not want all the items they originally requested in a divorce. For best results, speak to a financial professional about your specific fiscal situation and options. Be Mindful of the Date When Initiating DivorceWhile you might be tempted to file as soon as possible, it’s important to note that property division is based on the date of marriage separation in some states. Typically, the court uses a formal date of separation (DOS) to determine property division and the value of certain assets. “If you are expecting a large increase in the value of a major asset upon a certain occasion, be mindful of that when you decide to initiate the divorce.” Design a Joint Parenting Arrangement WiselyUnlike claiming a child as a tax dependent, claiming head of household is not assignable. If you’re negotiating who will claim a child as a dependent, “You can include a provision that the right to claim the child is dependent on the parent being up to date on their support obligation.” Plan Finances for After the DivorceClients often neglect to consider how their financial planning can change after a divorce. “Your risk aversion may be very different than your former spouse [‘s] and you do not need to keep the same investment trajectory you had before the divorce.” If you don’t know where to begin, you might want to hire a financial advisor. Remember to think long term when planning finances after divorce. The Division of Property Can Be ComplexDividing assets and properties isn’t always a simple numerical transaction. “Negotiating the division of property is an art form all its own,” After the asset is identified as community property, separate property or both, figuring out the value can be tricky. “For instance, a bank account with cash in it is pretty easy to value — look at the balance,” said Nelson. “But a retirement account, a house or securities can have more complex issues.” Retirement Accounts Are Not Worth the Statement BalanceJust as it can be difficult to value assets, couples often struggle to determine the true value of their retirement accounts. One reason that retirement accounts pose problems is that deferred tax will have to be paid at some point. “If one of the parties will be liquidating a retirement account early, then the highest marginal tax rate and the early withdrawal penalty might need to be subtracted from the value of the account,” said Nelson, who went on to explain that the value of these assets is often drastically reduced as a result. “Even if the account is not going to be liquidated, the taxes which will be paid on the money at the time of retirement can be considered and a reduction of the overall value of the asset might [be], and very often is, appropriate.” Division of Property’ Depends on Where You LiveWhen a divorcing couples heads to court for a property dispute, state law is used to divide the property using one of two classifications: community property or equitable distribution. With community property, both spouses own income and assets equally, and items can be divided evenly. Additionally, individuals can keep separate property. Some States Are Better for Getting a DivorceAccording to the government research site InsideGov, the five states with the easiest and most lenient divorce laws are Alaska, South Dakota, Wyoming, Iowa and Washington. The ease of filing, fees and processing times are all considered as part of the rankings. If time and cost are of the essence, you might want to consider where you live before filing divorce papers. Be Mindful of the Worst States for DivorceBased off InsideGov’s data, the most difficult states to get a divorce include Arkansas, New Jersey, Rhode Island, South Carolina and Vermont. Arkansas takes the longest amount of time at 540 days. If you live in one of these states, you and your spouse might want to consider relocating to expedite the divorce process. When in Doubt, Seek a Professional — Or It May Cost YouCapital and a financial analyst who has helped many individuals dealing with divorce, advises clients to seek professional help at all costs. “A simple mistake that drops your credit score 40 points can cost you thousands on your next mortgage.” “Making a mistake separating accounts, renaming beneficiaries or not setting up life insurance properly can cost you hundreds of thousands and impact you for years.” Make Sure You Actually Implement the DivorceDespite their eagerness to be divorced, many people actually fail to complete all the steps needed to make their divorces legal. For the best results, clients should make sure all their bases are covered and check up on spouses to ensure they have completed the necessary steps. “You don’t want to find out that your ex-spouse never refinanced the house five years ago like he was supposed to and [it’s] now in foreclosure.” “By the time you find out about it, your credit will be destroyed for years.” Compromise Could Help YouUnfortunately, divorcing spouses often refrain from compromising out of spite. While you might be tempted to fight every battle that comes your way, agreeing to compromises could save you a lot of headaches and money on legal fees when going through a divorce. As an added bonus, your decision to compromise could encourage your spouse to do the same. Factors Affecting Property DivisionIf you and your spouse cannot amicably divide assets and debts, the court will do it for you. In most cases, it is better that you come to an agreement on the fair and equitable distribution of property. While the court will come to a fair and equitable distribution, you may not get an asset that you want. Debts are considered in much the same way, but do have some additional parameters: Marital vs. Non-marital Property How Utah Courts Divide Property In DivorcesWhat makes equitable distribution in Utah so confusing and unpredictable is that judges in the state almost never rely on some fixed and definitive rules when it comes to dividing property in a divorce. Instead, judges in Utah enjoy discretion to take into account all factors and circumstances of each marriage before issuing a Judgement of Divorce. But in no way does it mean that judges in Utah have freedom to divide marital property however they see fit. Courts still consider a variety of factors in equitable distribution such as: Free Initial Consultation with LawyerIt’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
Ascent Law LLC
8833 S. Redwood Road, Suite C West Jordan, Utah 84088 United States Telephone: (801) 676-5506
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