Property division is one of the most important aspects of any New Jersey divorce. If you are not careful, you could end up making a mistake that could cost you dearly down the road. Here are three mistakes to avoid during property division in your New Jersey divorce.
1. Assets of the same value aren’t always the same
Just because two assets are worth the same doesn’t mean they are equal. For example, a bank account with $100,000 in it is not the same as a stock portfolio worth $100,000. The bank account is liquid, meaning you can access the cash immediately if you need it. The stock portfolio, on the other hand, is not as liquid. You would have to sell off some of your stocks to get cash, and sometimes that value can fall or rise depending on the market.
2. Failing to consider tax implications
State taxes play a significant role when determining the value of what you rightfully deserve. Take retirement accounts as an example. If you are awarded a traditional IRA, you may have to pay taxes on it when you start taking distributions, which is quite the opposite of a Roth IRA. A judge may fail to account for this extra expense, leading to an unfair split.
3. Failing to protect your interests
In the heat of the moment, it is easy to make decisions that are not in your best interests. It’s a common phenomenon to see spouses that are so angry with their ex that they agree to take on all of the debt in the divorce just to get them out of their life. Or, they may be so eager to move on with their life that they agree to sell off all of their assets and split the proceeds fairly. However, it’s helpful to proceed with caution when dealing with divorce. So, before making any decisions during property division, take a moment to think about what is truly in your best interests.
Property division can be a complex and emotional process wrought with unique challenges peculiar to different marriages. There are many pitfalls, and sometimes you can make an error even if you are very careful. However, rest assured that the law allows you to appeal a final divorce decree if there’s a compelling need to.