New Jersey is an equitable property distribution state when it comes to divorce. Reaching an equitable distribution of assets is complex because the state considers several factors before awarding any property to one of the spouses.
Avoid making these property distribution mistakes during divorce proceedings:
Reckless listing and classifying of assets
The state will only divide marital property and not separate property. Take your time to really identify all your assets and classify them carefully. You will be able to keep all assets you acquired before getting married, provided you have not commingled your assets with that of your ex.
Taking assets for their face value
Some properties are appraised for a certain value, which can be equal to the amount in your shared bank account. The difference is that the amount in your bank account is liquid, giving you immediate access. It could take months or years to sell a property, not to mention the capital gains tax. You should also consider that cash loses value over time, whereas property value usually appreciates, albeit property value can also depreciate with respect to the real estate market.
Forgetting about taxes
It is easy to forget about taxes when your focus is primarily on acquiring more or most of the estate. Although most assets transferred during the divorce are usually not taxable if done correctly, what you might not realize is the taxes are significant when you decide to sell or transfer the property after the divorce. Alimony and child custody also come with their own set of tax consequences. On top of that, marital retirement accounts may come with taxes if they become traditional Individual Retirement Accounts (IRA).
Think about all the tax implications and future tax consequences so the division is more equitable.
Property division is not easy. Often you will need the professional help of accountants, lawyers and financial consultants before you can reach a fair division. Remember to keep long-term financial stability in mind; do not act out of spite.