Joseph M. Lucas & Associates, L.L.C.
Dividing marital assets-mutual funds, bonds, stocks and the like-after a divorce is emotionally draining, tricky and complex, but financial advisers can help. These experts can assist divorced couples in Illinois in tackling the complicated issues that come up during property division. They guide both partners in reaching an agreement on the distribution of assets like the house, the bank accounts and insurance. As experts in money matters, they can also pinpoint financial consequences that divorce attorneys may miss.
A major issue facing a divorcing couple is taxation. For example, the distribution of money from a tax-deferred account may result in losses in the form of taxes. If a couple in a high income tax category liquidates a tax-deferred account, they stand to give up more than half of the distributions to state, federal and local taxes. To avoid such losses, the divorcing couple should agree not to withdraw money from the IRA, 401(k) or other tax-deferred vehicles. Another difficult issue is dividing the stocks. This can prove complicated depending on the time when the stock was acquired: before or during the marriage. The time of acquisition has a direct link to the ownership.
Typically in a divorce, the partners do not trust each other, so they tend to hire different financial advisers. Although being a financial adviser does not require any special investment expertise, it does call for negotiating ability and patience. Advisers can help the divorcing couple to see things from their ex-partner’s viewpoint-a difficult task because divorce brings so much compromising and emotion.
One reason that property division is difficult during a divorce is because it requires a determination on what is marital property. In Illinois, it does not matter who is actually listed on the title-if the couple acquired the property during the marriage, it is deemed marital property. Once property is classified as marital property, it is subject to division by the court and the division may or may not be equal. Discussing the divorce and property at stake with an experienced family law attorney can help divorcing couples know what to expect beforehand, which may help them reach a more beneficial divorce settlement.
Source: Investors.com, “Financial Advisers Help Split Assets During Divorce,” Gary M. Stern, Jan. 25, 2013