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Understanding finances important part of divorce process

Most people in New Jersey and elsewhere enter marriage with the expectation that it will last. Unfortunately, it does not always work out. A few tips may help those embarking on the process of divorce.

The first step involves taking an inventory of all of one's liabilities and assets. This includes gathering documents that verify expenses, liabilities, assets and income: for instance, retirement, bank and brokerage statements. Not being in the dark about one's financial situation makes it easier to successfully negotiate a settlement that is fair.

Considering all asset splits' tax ramifications is also necessary. Some assets might come with a high amount of taxable gains during the property division process, whereas others may require one to pay ordinary income taxes. Thus, calculating the taxation of assets that one may be getting as part of a divorce settlement can be helpful before agreeing to any particular asset division.

Checking one's credit is another important step in the process of dissolving a marriage. Sometimes a future ex runs up debt on a credit card out of revenge. A nasty surprise on a credit report may have a negative impact on one's abilities to secure loans in the future.

If the parties are able to see eye to eye when it comes to asset division and property distribution in New Jersey, they may find divorce mediation or direct negotiations helpful. These alternatives to divorce litigation allow those involved to work amicably toward a divorce settlement that is acceptable to both parties. If they are unable to achieve such a settlement, a judge will end up deciding for them how their assets will be divided, and the final result may not be personally favorable to one or both parties.

Source: forbes.com, "How To Succeed Financially During And After A Divorce", Mark Avallone, Jan. 27, 2017

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