Most divorcing couples in Virginia can expect an equitable distribution of marital property. However, there are many steps both partners should take to protect their own finances and avoid long-term financial damages. Here are three tips to protect financial assets during divorce proceedings.
According to Forbes, one of the biggest hang-ups during divorce proceedings is the distribution of joint property, which can be incredibly complicated given that both spouses may have complex assets. Thus, it is important for the divorcing couple to first obtain a thorough professional valuation of all assets that might be considered marital property. Yes, this means evaluating the worth of standard financial and physical property, such as bank accounts, retirement accounts, insurance policies, houses, and acreage.
However, there are plenty of other assets that might not come immediately to mind. Intellectual property, tax refunds, and even cemetery plots are factors to consider. Emotionally priceless items (such as keepsakes and photographs) and valuable collections, from art to wine to rare books, often qualify as marital property and are, therefore, subject to equitable distribution. It is essential that spouses incorporate these important but often forgotten resources in any evaluation of assets. Seeking a professional appraisal from a disinterested third party is important to minimize the risk of missing assets and to avoid the common mistake of over-valuing sentimental items.
Second, couples with joint accounts should separate these finances as quickly as possible during a divorce according to CNBC. A vindictive spouse with a shared account can wreak havoc on the other’s finances by over-spending or by neglecting mortgage or credit card payments. Each spouse should notify banks, insurance providers, and credit card companies of the separation and take steps to either close any joint accounts or remove the other person from the account. Furthermore, it is crucial to update titles and deeds as soon as possible after the final property division has occurred.
Third, couples with retirement funds should avoid the temptation to use this available money to pay off debts or expenses related to the divorce. At the time, this may seem like a simple way to bring the divorce proceedings to a rapid conclusion and terminate obligations to a former spouse. In the long term, however, drawing down retirement accounts during a divorce can have a severe negative impact on retirement finances. Indeed, research has shown that poverty levels among divorced men and women over the age of 62 are significantly higher compared to poverty levels among older couples who are still married.