Emotions run high during a divorce, but it is important that you protect yourself during the divorce to ensure that you aren’t financially damaged when the ink is dry on the settlement. The difficulty of property division in a divorce is often complicated when there are considerable assets or businesses included in the divorce. California residents might need to consider some often unthought-of aspects of property division that can greatly affect their financial future after the divorce.
One of the common areas of contention during a divorce is the marital home. While both parties might want to keep the home, the cost of the upkeep has to be considered. The mortgage has to be paid, the taxes have to be paid, and routine maintenance has to be done. All of these expenses can add up to be more than one party might be able to handle alone. It is also important to consider that selling the home could prove difficult if it becomes necessary down the road, which might increase the financial burden.
Some of the same considerations have to be made for a business. Because the business might prove difficult to value, ensuring that the settlement is fair when a business is part of it can prove just as difficult. Keeping a business you worked to build might end up being a sentimental decision that could negatively impact you down the road.
When you are trying to decide if a settlement is in your best interest, you have to think about what the asset can do for you down the road. You should make sure that you have both liquid assets that can help you stay afloat, as well as illiquid assets that might increase in value down the road. Understanding how California law views assets in a divorce is also necessary to ensure you get the settlement you need.
Source: The Wall Street Journal, “The Biggest Financial Mistakes Divorcing Couples Make” Ted Jenkin, Apr. 24, 2014
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