One of the significant concerns of couples beginning the divorce process in New Jersey is finances. For wealthy individuals going through a high-asset divorce, these considerations are often more complex, needing additional preparation and time for negotiations.
Understanding their own financial state
Before the divorce process begins and couples negotiate for the division of assets, each spouse should become familiar with their financial state. Some of the actions they can take to do this include:
- Listing all joint debts and assets
- Gathering documents as evidence of debts and assets
- Separating joint accounts such as credit cards
- Creating a budget for post-divorce life
What kind of assets should you be concerned about?
If you are about to enter into a high-asset divorce, your list of assets might be quite varied. It might be easy to overlook an asset unintentionally. However, you should be aware of some of the assets that might be addressed during negotiation. The assets include:
- The family home and any investment property
- Jewelry and other personal items
- Stock options
- Work bonuses and vacation pay
- Property inside a safety deposit box
- Investment accounts and savings and checking accounts
- Retirement accounts and life insurance policies
How might taxes affect your financial state post-divorce
The tax implications of many of the decisions made during a high-asset divorce can create another financial challenge during divorce. For example, if one spouse pays spousal support, they can claim it as a deduction. However, the spouse who receives it will need to pay taxes. Similarly, dividing certain accounts, such as retirement accounts will entail considering tax implications. For some accounts, division without penalty is only possible with a QDRO, or qualified domestic relation order.
Protecting your financial state is very important. Taking the time to get familiar with your financial state and be clear about your expectations for the future will help you during your negotiations.