Going through a divorce means you'll have to divide property and debt. Property division negotiations are never easy, but with a bit if compromise and the right approach, you can settle on an agreement that works for both individuals.
When preparing for property division negotiations, don't focus all your time on tangible assets such as the family home, cars and jewelry. These things are important, but you need to turn just as much attention to the many financial assets you hold with your soon to be ex-spouse.
Here are five types of financial assets that could come into play during divorce negotiations:
- Cash on hand. If you have any cash on hand, e.g., money you were saving for a vacation or home improvement project, it is subject to property division. The other person may attempt to hide large sums of cash from the court, so keep this in mind.
- Bank accounts. Most couples have at least one joint bank account, if not several. This includes both checking and savings accounts, so make note of all these before starting negotiations.
- Retirement accounts. If you're young, you may not think much about retirement, as it's many years down the road. However, if you neglect retirement accounts in your divorce now, you could regret it later in life. Focus on IRAs, 401(k) and pensions.
- Stocks and bonds. These are often held outside of retirement accounts and are typically among the most valuable financial assets in a divorce.
- Annuities. Did you purchase an annuity with your spouse while you were married? If so, you need to consider the best way to divide it in your divorce. This can be tricky since you're already receiving payments, but there are options to consider, such as letting the other person keep the annuity and making it up to you through other assets.
As you begin the divorce process, make a list of every financial asset you have. Even if it's something small, you need to bring it to light. Just the same, don't let the other person hide anything from you, as doing so is against the law.
Property division complications are often a sticking point in a divorce. However, if you have a clear idea of your assets and debts, as well as knowledge of how to protect your legal rights, you can prevent additional stress and complications.