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Consider these points regarding property division in divorce

On Behalf of | Jul 21, 2021 | Property Division |

People who are going through a divorce have a lot of things to think about. One of these is how they will divide the assets they accumulated during the marriage. While some might think that this is an easy process, there are a lot of variables that you have to consider when you’re handling this aspect of divorce.

It is not possible to just look at the value of assets. Instead, you must consider how the asset might change in the future or what expenses might come from the asset.

Consider taxation of the asset

Some assets are taxed, so this must be a consideration when you are splitting property. This means there is a huge difference in what you’ll walk away with if you get $1,000 in cash versus $1,000 in stocks. This may also affect other types of assets, especially if the asset has appreciated since its purchase.

The length of time you have had the asset since it was purchased will determine what type of gains tax is levied on the asset. Taxes are paid on the difference between the price you sold the asset for minus what you paid for the asset. Long-term gains taxes occur on assets you have had more than a year. Short-term gains taxes are for assets you have had under a year.

Think about the appreciation possibility

Some assets might appreciate in the future. This could mean that they end up being much more valuable than they are at the time of the divorce. The issue with this is that you can try to guess which ones will do this, but usually there isn’t any guarantee about which ones will appreciate in the future.

Anyone who is going through a divorce should ensure they understand the implications of property division options. This might help them to determine what’s best for them. These decisions should be made early in the case, so you have time to try to develop a strategy based on them.