Division of accounts should be done carefully during a divorce

On behalf of Stange Law Firm, PC posted in High Asset Divorce on Thursday, April 17, 2014.

The dividing up of retirement and investment accounts needs to be accomplished with care during a divorce.  If done incorrectly, one or both spouses may end up being financially punished.  Money may be lost and couples may have no way of getting the proceeds returned.

Couples do not always understand that one spouse may be taxed greater than the other spouse when accounts are equally divided up.  This is because the cost basis could differ significantly depending on who receives the proceeds.  There are even instances where allowing the other spouse to have more in a particular account could result in overall tax savings.

Couples should take an inventory of everything they own when they are contemplating filing for a divorce. This also includes listing out what accounts are owned jointly and individually. We can’t rely upon memory alone when conducting such an inventory. It’s easy to forget about bonds or stocks lying around in a safe-deposit box. A spouse may also have forgotten about an account listed under her maiden name.

Able family law attorneys will discuss property division with couples and help the two make determinations concerning assets such as proceeds from a business or retirement accounts. This may come down to explaining how non-marital and marital property can be distinguished.

For Missouri couples the property division process during a divorce can often be stressful and contentious. While spouses are often unwilling to give up certain property because they feel the other spouse does not deserve to receive it, the goal of property division during a divorce is for a fair distribution to take place.

Source: The Wall Street Journal, “If Divorcing, Divide Investments With Care,” Lisa Ward, April 6, 2014

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