How to pick the best assets when going through a divorce
This article looks at factors to consider when choosing how to divide marital assets during a divorce.
Divorce involves not only the splitting up of a relationship, but also the splitting up of whatever assets and liabilities the couple owns. Texas is a community property state, meaning that, with some exceptions, whatever property either spouse acquired during the marriage is considered to belong to both spouses. However, when it comes to actually dividing property, most couples choose to negotiate for themselves which assets they will hold on to and which they are willing to let go of.
Choosing the right assets
As CNBC notes, choosing the right assets is not always easy since two assets that may be worth the same on paper could have very different long-term financial implications. For many people, it is important to look at an asset’s liquidity. Holding on to the marital home, for example, could be seen as a big “win,” but if that home’s maintenance and upkeep fees prove to be too expensive then its owner could soon find themselves with a large asset to their name but without the financial means to cover even basic expenses.
More liquid assets, such as investments and pensions, may be more worthwhile. These are assets that are more likely to grow in value over time and which are less subject to market volatility. Real estate, on the other hand, can quickly fall in value if the market turns sour or there are not enough buyers.
Age an important factor
As Forbes points out, another factor to consider when deciding which assets are the most important are the divorcees’ ages. A young couple going through a divorce will have very different financial needs than an older couple where each spouse is preparing for retirement.
A young divorcee, for example, may have young children to take care of, and in that case holding onto the house may make a lot of sense, especially since it will disrupt the children’s lives as little as possible and allow them to stay in the same school. A young couple is also less likely to have significant retirement assets, but child support and spousal maintenance may be more important.
For older couples, however, child support and custody are not likely to be a factor. The marital home is also likely to be too large of an expense for somebody who is preparing for retirement, which typically makes choosing more liquid assets a greater consideration.
The challenges that anybody preparing for divorce faces can be great and there will be long-term implications. A family law attorney can assist people who are going through a divorce in a number of ways, including by helping them negotiate a settlement with their former spouse that is creative in addressing the needs of the party both now and in the future.