Has your mom every said to you, you can do this the easy way or you can do this the hard way? Well this phrase is applicable to Tennessee residents who are going through property division during a divorce. The outcome of property division is the separation of assets and liabilities. However, the method by which these items are divided can make a big difference for both parties.
The good news is that there are ways to make this process more favorable and beneficial to those who pay attention to their financial needs and conditions. Calculating a post-divorce budget can give a soon-to-be divorced person a ‘snapshot’ of sorts into what the financial future could bring. This can help when deciding what assets and liabilities are a top priority during the property division process. Compiling and understanding all financial documents can also aid in the process and aid in determining correct valuation of assets.
Taxes are something that can sometimes be misunderstood by couples in a divorce. For example, if one spouse receives a large sum of money or asset, there are often taxes associated with such distributions. Divorcing spouses should understand these potential tax consequences of asset division.
While many people going through a divorce may choose to take the rough road, some will be wise and prepare themselves for the impending property division. Because finances are unique to each divorcing couple, it is difficult to say what finances will be confusing, undervalued or even most desired. With these yet to be determined, it is anyone’s guess what may be coming in a divorce and property division. People in this position may want to take out some of the guesswork and prepare their finances appropriately.
Source: Huffington Post, “10 Financial Mistakes to Avoid in Divorce,” Karen Covy, Accessed on Feb. 14, 2016