Asset division is a critical stage in the divorce process. The government allows couples to negotiate their asset distribution, but you should be knowledgeable to get a fair settlement. Otherwise, you might end up with less valuable assets than you think. Consider these critical factors during the negotiation.
Value
Most assets have two values, market or financial value and the value you attach to them. Consider both forms of values during negotiations and decide based on your preferences. For example, you should know the market value of art collections you must divide. However, you may also consider your attachment to pieces that have been in your family for a long time.
Ownership Costs
Asset maintenance costs reduce an asset's net value. For example, you must fuel a car, maintain it, and purchase auto insurance. In addition, you must pay utility bills, property taxes, and maintenance costs for a home. On the other hand, you don't pay maintenance fees for cash at the bank. Understand the ownership costs so you negotiate, knowing each asset's true value.
Depreciation and Appreciation
Consider the future value of assets. Monetary values of assets change over time; some appreciate while others depreciate. For example, real estate properties tend to appreciate while automobiles tend to depreciate, though exceptions exist.
Consider a case where you must choose between a jewelry piece and a car, each worth $15,000. Most likely, the car will lose its value long before the jewelry does. A professional assessment or valuation of the jewelry can help. That way, you can consider the asset's future values during the negotiations.
Liquidity
You should know whether you will need cash immediately after the divorce. This knowledge is critical because some assets are easier to liquidate (turn into cash) than others. Ensure you have a good mix of assets if you intend to liquidate some after the divorce to get expenditure money.
Income Generation
Assets that generate additional income also tend to be more valuable than others. For example, shares that yield dividends and businesses that yield profits are more economically valuable than assets that don't generate income.
Taxation
Ordinarily, you won't pay property transfer taxes after a divorce settlement. However, you may pay taxes on some of your assets after the divorce. For example, real estate property attracts tax, and businesses must pay tax. Consult a tax professional for advice, especially if you have high-value assets whose tax obligations you don't understand.
For more information, speak with a divorce lawyer.
Share31 July 2023
My name is Noni. When I was in college, I was hit by a car while crossing the street. My life was never in danger, but I did break a few bones and had a lot of huge medical bills. I was hoping I wouldn't have to get involved with an attorney, but unfortunately, it came down to that. I used a family friend who is an accident attorney to get some compensation. A few years later, I was hit while riding my bike and had to go through the same process. I suppose I'm lucky to be alive. And it's thanks to accident attorneys that I have been able to put my life back together. I started this blog as a way to let others know just how much lawyers can help you in certain situations.