Dividing assets during your split
The process of divorce can be emotional and complicated, as some Michigan couples discover. Not only are you having to face the end of a very important relationship, but you also need to begin unraveling the things you created together, from assets to future plans, including some often overlooked but important details.
Division of assets is not as simple as each taking their part
The process of dividing assets usually includes negotiations between the spouses, particularly as they figure out what each should keep and what each might want and is willing to give up. Sometimes, the process includes selling an asset, such as the family home or investment real estate property and splitting the proceeds. The process is more complicated than this, as there might be outstanding debts to pay off, such as joint credit cards or mortgages, and tax implications to deal with. With the family home, the negotiations might result in one person receiving the home, but this will involve additional issues, such as refinancing the home in one person’s name.
Additionally, retirement and pension accounts must be discussed. These accounts are often divided during divorce and a qualified domestic relations order is issued by the court so that the funds can be divided and the recipient can transfer their part into their own IRA.
Things that you should not overlook
There are details related to this process that might be easily overlooked but that are quite important as you begin to plan for life post-divorce. These include:
• Updating beneficiaries on life insurance policies and retirement accounts
• Closing joint savings and checking accounts and opening new individual accounts
• Relinking accounts for direct deposits and automatic payments
• Establishing new beneficiaries for individual accounts, in case of death
Being thorough and careful during the period is very important. When it comes to finances, it is best to be clear from the beginning to avoid surprises later.
