January 4, 2014

Division of Assets in Pennsylvania Divorce

Avoiding unnecessary costs

Once you and your spouse have made the decision to divorce, be sure to stay conscientious and logical about division of assets. Splitting everything during divorce is ultimately a matter of getting each spouse’s name off of the bills agreed upon in the settlement. Keep in mind the following considerations when it comes to division of assets and financial security during divorce in Pennsylvania.

Itemizing

It bears repeating how important it is to understand your financial information prior to equitable distribution in Pennsylvania. Because Pennsylvania is not a community property state, division of assets is usually more complicated than dividing down the middle. Make sure you consult with an attorney before making any moves, but old accounts should be closed and divided pursuant to your settlement terms. You don’t want to chance your ex adding to the balance or leaving you with the bill.

The Marital Home

Normally, the marital residence raises the most cause for concern. After fighting to “win” the home in the settlement, many find themselves struggling to keep up with mortgage payments, utilities, upkeep, property taxes, or insurance. One primary consideration is to avoid tipping off your real estate broker that the home is listed as result of divorce. Keeping this aspect personal will prevent vulture buyers from trying to haggle huge amounts off the price to capitalize on your personal situation.

Taxes

By way of a document called a QDRO or Qualified Domestic Relations Order, transfer of vested stock options, IRAs and 401(k) plans will be sorted out for division. Whatever moves are made can depend upon tax consequence of the means of asset division. A party’s share could be dramatically reduced by taxes and penalties.

You may want to consider choosing a Bucks County divorce lawyer who is well versed in financial matters, such as a Certified Divorce Financial Specialist. As soon as a couple decides to divorce, consulting with professionals in divorce finances can help each retain as much access to shared assets as possible. If you already have professionals who help manage your assets, provide your divorce lawyer with his or her contact information so each have a complete picture.

Support

In life, everything changes constantly and nothing is ever guaranteed – even if support is addressed in the settlement. Unfortunately, life is not that simple; nor is it guaranteed. Do no overlook mandating the continuation of, or new, life insurance while support payments are being made. No one wants to think of it, but if your ex were to pass away without those precautions in place, the support payments would end. You ex may also change beneficiaries or lapse coverage even if the mandate is in place at settlement. The only way to ensure this does not change, is for the spouse receiving support to own the policy. This also applies to ensuring mortgage or other debts such as future education costs, will be paid in the event that your becomes disabled or dies.

Update Beneficiaries ASAP

Many people tend to overlook updating their beneficiary designations on their insurance policies. Unless you want your ex to receive all of your savings and retirement accounts at death, be sure to revisit this information. This advice applies to retirement accounts such as pension, IRA’s, 401(k)’s, annuities and life insurance policies.

Overall

To summarize all of these considerations, simply remain as logical and aware as possible. Often, our own emotions and those of the other spouse can override logic. If both parties can cooperate during the division of assets, less legal fees will be incurred and assets can remain protected. It is also strongly recommended to seek both financial and legal professionals to help with the more complicated legal aspects of divorce.

Contact the Bucks County divorce lawyers at the Law Offices of Michael Kuldiner, P.C. at (215) 942-2100 for a consultation. You may also complete the online inquiry form and a member of our team will contact you shortly.