Divorce is an emotionally charged event. You might be consumed with feelings of guilt, anger, sadness and loss, and this can make it very difficult to think objectively when it comes to resolving concrete matters.
For instance, in any divorce, the marital assets and debts will need to be divided. This is a mathematical, complex process that requires a clear mind and thorough understanding of what is at stake. People who are overly sentimental, feeling guilty or seeking revenge may not be in a position to make decisions that are in their best financial interests. If, for example, you are getting divorced and there are pensions or retirement accounts involved, you will want to be sure you understand a few things before you agree to anything involving these accounts.
- How much are they worth? Calculating the actual value of these accounts will require familiarity with tax laws and obligations. An account may be worth far more or less than you realize when you take into consideration when and how they are taxed. Further, certain accounts will continue to get more valuable over time.
- Giving them up in exchange for real estate may not be wise. People can make the mistake of thinking that a home is more valuable than a 401(k) or IRA. As noted in this CNBC article, homes and other properties require ongoing maintenance and investments. Ultimately, you might find you are putting more into a home than you are getting out, which can be upsetting if you gave up all or a portion of a retirement account in exchange for keeping a home.
- Even if you're not the one who contributed to an account, it could still be marital property. With some exceptions, assets earned during a marriage are considered marital, rather than separate property. This means that they are eligible for distribution, unless you have a prenup or postnup saying otherwise. In New York, marital assets are distributed equitably, or fairly, between spouses.
This can all be a lot to think about, particularly when you are already dealing with the emotional, social and parental impact of the divorce. Thankfully, you don't have to do it alone. You can lean on the support and guidance of your attorney to fight for a fair and satisfactory settlement.