When a couple builds a life together, securing a lifelong union together through marriage, they rarely think about not being together. Nonetheless, couples in North Carolina and elsewhere decide to end their forever through divorce. No matter the reason for ending a marriage, the divorce process requires couples to address serious and often difficult decisions. When it comes to property division, spouses not only worry about maintaining what is rightfully theirs but also ensure they get an equitable portion of the marital property.
Although couples divorce every day, it is not as simple or easy life event to go through. The decision made during this process could impact a spouse in the immediate and well into the future. As such, it is important that a spouse is aware of the impact the divorce process could have on them, especially when it comes to property division. While it may seem obvious to split the marital assets in half, this does not always arrive to an equitable division. Therefore, one should understand the common mistakes made during asset division and how best to avoid them.
To begin, one should understand that not all assets are equal. In other words, even when two assets have been valued the same, they may not be equal once taxes are factored in. For example, selling stock has tax implications, making it imperative to consider this when dividing this asset. Another mistake divorcing spouses make is with their retirement accounts. When a withdrawal is made, there is a 20% tax withholding. When there is an early withdrawal, this could result in a 10% penalty. Thus, one should consider a qualified domestic relations order to address retirement accounts.
One more mistake that spouses might make in the property division process is dealing with the family home. For some, selling the house and splitting the proceeds is the best way to address this; however, in some situations, one spouse may want to remain in the family home. When this occurs, be careful of certain things, such as no longer being joint owners or both being responsible for the mortgage. As such, it may be necessary to refinance the loan. Finally, it is important to have the house appraised when valuing it during the divorce.
Property division is one of the most contentious divorce issues. As such, it can evolve into an emotional, heated and lengthy battle. Whether one is considering divorce or is in the midst of the process, it is important to fully understand their situation and the best route to take to arrive at a favorable resolution.