Divorce is often contentious. Shortages of cash that can inevitably come along with the divorce process also do not help matters and therefore care should be made when it comes to financial considerations.
While one spouse or the other may be provided a number of assets during the property division process, the ability to get by financially may still be hindered if the assets cannot be easily disposed of so that this particular spouse has access to cash. For example, one spouse may end up with the primary residence while not able to make the payments. Another spouse may end up with access to retirement accounts that they cannot cash in without being exposed to financial penalties.
There can especially be difficulties if one of the spouses is the owner of a closely held business. Trying to assess how much the business is worth can be difficult when it comes to division of assets. Also, the business may have little market value when it comes to converting it to cash.
Other suggestions that have been made concerning limiting of the financial damage includes not letting the divorce drag on as couples fight over a number of items rather than have such matters resolved. Also, using money as a weapon in a divorce actually can prove more costly to both parties.
It may be most important to remain clear-headed concerning a divorce and try to put things into perspective. As Texas attorneys, we often take the time to sit down and discuss the ramifications of property division and make certain that issues related to taxes and debts are discussed. Trying to minimize the risks that come along with this division is vital.
Source: The Wall Street Journal, “The Biggest Financial Mistakes Divorcing Couples Make,” The Wall Street Journal, April 25, 2014