Divorce, property division can impart powerful lessons

Divorce, property division can impart powerful lessons

Divorce, property division can impart powerful lessons

Any large-scale life event brings with it a chance to learn a range of lessons. In fact, a great deal of our knowledge and understanding comes from having gone through difficult experiences. We learn from the good choices that we make, as well as from the decisions that we would like to forget. Divorce and property division are no exception, and savvy spouses in New York will take advantage of the opportunity to learn and grow from the experience of moving beyond an untenable marriage.

The division of marital property is one of the most difficult aspects of any divorce. This can be especially true for spouses who played a minor role in managing the family’s financial matters. It can be intimidating to delve deeply into the assessment of family income, assets and debt. However, doing so can lead to a far greater understanding of what one’s financial future will look like moving forward.

Many parents worry that they will not be able to provide their children with the same level of support and attention after a divorce has taken place. By focusing on the property division portion of a divorce, it is possible to gain a clear estimation of what one’s budget will be in the months and years to come. If that budget seems insufficient to meet the needs of the divided family, adjustments can be made during the property division process.

Most New York parents find that they are more than able to provide the love and care that their children need, even after divorce has altered the family structure. The property division process can ease many of the fears that accompany divorce, as it gives spouses the chance to fully understand their available resources and the need to create a budget for future expenses. Often, financial education is one of the most powerful lessons that can come with the end of a marriage.

Divorce and property division

Source: The Huffington Post, “14 Invaluable Life Lessons Learned From Divorce“, Brittany Wong, Aug. 4, 2014

The role that debt plays within property division in New York

When considering the financial aspects of a New York divorce, spouses should not overlook the issue of debt. Just as assets are divided during property division, so too are the debts accumulated within the course of the union. The manner in which debt is handled during divorce will play a significant role in the financial stability of both spouses in the years to come.

Perhaps the most important thing to realize is that one’s divorce agreement is of no concern to creditors. In the eyes of a credit card issuer or other creditor, the parties listed on the account are jointly responsible for repaying the debt, regardless of the agreement they may reach during the course of their divorce. Therefore, if one spouse agrees to assume a given debt and fails to repay that obligation, the creditor can and usually will pursue the other spouse for repayment.

The best way to avoid this fate is to pay down as much debt as possible before the divorce is finalized. In some cases, this will require dipping into savings or selling off an asset. However, the peace of mind that is gained holds a value in and of itself. Knowing that these accounts are paid off and closed can help one move forward without worries that the matter will arise at a later date.

When considering how to structure the division of debt during a New York divorce, spouses must take a big-picture approach to their current and future financial standing. Whenever possible, paying off as much debt as possible prior to the property division portion of a divorce is the best course of action, even if it means depleting savings or liquidating assets to do so. The ability to move on without fear of future credit damage has a value all its own.

Source: Fox Business, “Debt and Divorce: 5 Steps to Make a Clean Credit Split“, Dawn Papandrea, July 14, 2014

In dividing marital property, focus on retirement accounts

The legal act of ending a marriage is the same for all New York couples, even though the details of each divorce are unique to the spouses involved. The same can be said of the intricacies within a divorce; both spouses are dealing with the same set of facts, but the best interests of one party can be vastly different from those of another. Women who are divorcing often have different concerns than their husbands, and should be sure to identify and address those needs during the division of marital property.

The primary example lies in retirement funding. While there are certainly notable exceptions, for the most part, women still earn less than their husbands, and often amass fewer retirement benefits. As a result, older women who move toward divorce have a unique set of needs when dividing marital assets. Unfortunately, many in the legal profession see far too many cases in which wives focus on the wrong set of assets.

Often, the error comes in fighting for the right to keep the family home, while letting retirement savings remain with the husband. This is usually not a good idea, as the value of retirement investments are a far more stable investment than a piece of property can be, especially in times of instability in the real estate market. In addition, the costs of maintaining and ultimately selling a home can make it an even more unbalanced division of assets.

Women should focus on the various retirement assets held within the family, and make savvy decisions on which types of marital property are best suited to meet their long-term financial goals. With the right degree of planning, it is possible to emerge from a New York divorce with a solid financial foundation for the future. For those nearing retirement age, certain assets are worth far more than others, even when the values appear to be similar on paper.

Source: Forbes, “The Big Money Mistake Divorcing Women Make“, Kerry Hannon, July 3, 2014

Spouses could be hiding marital assets online

When a New York couple is preparing to divorce, one of the most important tasks that must be accomplished involves gathering information on the family’s financial standing. This includes gaining access to documents regarding income, assets and debt. For some, questions will arise during this process when certain holdings seem to be depleted. In such cases, it may be possible that a spouse has taken steps to attempt to shield marital assets from the property division portion of the divorce.

One way that spouses can achieve this goal is through the use of services such as Bitcoin. This company offers clients the ability to convert their money into a form of digital currency. The funds are then stored online in a Bitcoin account. Many readers may recall that Bitcoin was the currency service of choice for many Silk Road customers. Silk Road, which has since been shut down, was an online marketplace for the sale of drugs, illegal weapons and other illegal goods and services.

For those who are preparing to divorce, Bitcoin offers a high degree of anonymity and a difficult road to follow when trying to link a client and hi or her online account. For those spouses who are not above taking unscrupulous action to attain a monetary gain, Bitcoin offers a way to hide assets. While it is possible to discover this type of digital currency conversion, it is not easy to do so.

For New York spouses who are concerned that their partner may have converted marital wealth into a form of online currency, there are several ways to find answers. One simple suggestion is to ask, by means of including online currency within the list of assets that are required to be disclosed. This step may be enough to persuade a spouse to come clean about these funds. In other cases, however, it may be necessary to hire a forensic computer specialist to determine whether marital assets may have been converted into a digital format.

Source: CNBC, “Bitcoin could be used to hide assets in divorces, warn lawyers“, Jane Croft, June 3, 2014

Property division and social security benefits within divorce

While considering the details of their divorce, many New York spouses fail to give the proper attention to their retirement planning. The two topics may seem unrelated at first glance, but they are in fact intertwined. The outcome of one’s property division settlement can have a huge impact on retirement funding, and smart spouses will include retirement planning in their negotiation strategy.

When determining the division of marital assets, individuals must begin with a working understanding of their projected retirement income. For those who feel that they may need additional financial help during retirement, it makes sense to pursue investments during the property division process. These types of assets will provide a better income stream in later years, as opposed to the family home or personal property.

Many spouses are unaware that they will be able to claim Social Security benefits against the work record of their ex. This is true only when the marriage lasted at least ten years, and when the divorce has been final at least two years prior to making the initial claim. Claiming these benefits can allow an individual to postpone claiming against their own record, which allow the payment level to grow as time passes.

However, in order to maximize one’s Social Security benefits in this way, it must be financially feasible to get by on the Social Security spousal benefit while the individual benefit grows. This requires advance planning, and the acquisition of other income-producing assets. For those in New York who can take a big-picture approach to divorce and property division, it is possible to structure an agreement that will ensure financial stability as retirement approaches.

Source: Fox Business, “5 Ways Divorce Can Impact Your Social Security Benefits“, , May 13, 2014