Are you in the process of a divorce or think you may be headed that way? If so, make sure that you don’t end up getting a raw deal when you divide the marital assets. It’s often smart to have a financial advisor on your team as you go through the process of dividing assets — particularly if those assets are substantial. The larger the assets that have to be divided, the greater the potential for a serious mistake.
Here are some assets that financial advisors say you may want to reconsider laying claim to in your divorce:
You may have an emotional connection to your home, but divorce requires you to focus on practical concerns. If you keep the home, your spouse may end up taking the largest portion of the retirement benefits and other assets. Meanwhile, the home may turn into a financial albatross. As an investment, homes can be problematic because the real estate market is unstable. In addition, you may have trouble keeping up repairs over the years.
Investments on which you owe taxes
Tax-deferred retirement accounts and investments that have appreciated greatly in value could be worth significantly less than you realize because of the taxes due. That’s something that you have to figure into the total value of your settlement — or you could be caught significantly short during your retirement.
The family business
You may or may not want the family business. If it’s your business and you’ve worked hard to build it, then you probably should try to keep it. On the other hand, if you were playing a supportive role in it, you probably aren’t in a good position to keep the business thriving. If the business was a joint venture, you may need to carefully consider if it will survive your split. You may be holding onto a dream that isn’t achievable on your own.
When there’s a lot on the line, the best thing you can do is take your time. Don’t rush to a settlement until you and your attorney have time to evaluate all the marital assets and the long-term consequences of the split you’re seeking.