One of the most complex parts of a high-asset divorce is working through the property division process. Many people don’t realize how detailed this is until they’re trying to get it taken care of.
Making sure that you get everything divided is crucial so you and your ex can be completely done with each other. Be sure to consider these points as you’re working through this part of the divorce.
Assets and debts must be addressed
You can’t divide up the assets and forget about the marital debts. Many people choose to divide the larger assets first and then use the smaller assets and the debts to create an equitable property division plan.
One thing to think about is whether you can liquidate some assets so you can get the debts paid. Neither party would have to worry about the debts if this happens. It can be beneficial since both parties can suffer if one doesn’t pay the debts as they’re ordered.
Creditors don’t have to abide by the property division terms because they weren’t part of the divorce. This means that they can still hold you accountable for debts your ex was supposed to pay. Your credit report and score can take a hit if they don’t pay those debts.
Certain retirement accounts need a special order
Retirement accounts, such as 401(k) plans, that are covered by the Employment Retirement Income Security Act will need a qualified domestic relations order to be split. The QDRO provides instructions to the plan administrator for dividing the retirement account. Having this set at the time of divorce helps to reduce the tax implications of an ex getting part of the retirement account.
There are strict terms for the QDRO. Plan administrators must review these orders. They can kick back any QDRO that isn’t set up properly. At that point, the court would have to correct the order so the intended payee can receive what they’re due.
Taking the time to ensure you’re getting everything in order during the property division process is critical. Working with someone who’s intimately familiar with these situations can help you to ensure that you get everything you should during the divorce.