When couples living in North Carolina decide to end their marriages, property division is often a primary consideration. In many cases, the spouses genuinely want a fair and equitable settlement but may not fully understand the value of all of their assets. This can sometimes lead to mistakes during negotiations.
One way in which a property division can go awry is when a spouse only looks at the “on paper” value of an account or asset. For example, a home may be worth its appraised value, but the cost of maintaining it over time needs to be taken into consideration. Similarly, financial accounts may be taxed differently, which means that their long-term value can vary significantly from what the latest statement says.
Another area in which divorcing spouses should be cautious is that of ongoing financial commitments in the form of alimony or child support. People who are counting on these payments to meet their day-to-day needs should be aware that they could be curtailed if the people making the payments should die or become disabled. One option is to take out life and disability insurance policies to help secure these financial obligations.
Property division is often one of the most contentious divorce legal issues, and thus it is difficult and complex enough without taking into account the potential financial and tax ramifications. Even the division of a retirement account must follow strict procedures in order to avoid an adverse income tax consequence. As such, a person who is going through a divorce might find it advisable to have the assistance of a family law attorney when negotiating a property settlement agreement.