As summer has ended and fall is in full swing, so are some spouses’ plans to finally get divorced and move on with their own lives. The start of the school year in Texas marks the start of the season for divorce for many couples. A couple of tips may help those embarking on the road to divorce to avoid some costly mistakes.
First, it may be tempting to hold onto the family home following the divorce. After all, the family home may be filled with many positive memories. However, one spouse may find it financially challenging to keep up the home by himself or herself when it comes to maintenance projects.
Due to the high cost of maintaining a home, liquid assets of a similar value, such as financial accounts, are generally preferable. It is also critical not to get stuck with an asset that tax laws will negatively affect more. For instance, $200,000 that has been placed in a checking account is much greater than $200,000 that has been placed in a retirement account that is taxable.
Asset division is often one of the most contentious parts of any divorce proceeding in Texas. After all, two spouses may not agree on how to split their funds and other valuable items in a reasonable way. Still, they may be able to work together to achieve a mutually beneficial and satisfactory settlement without further court intrusion, through processes such as divorce mediation or collaborative divorce. In this way, they can feel more in control of their divorce proceeding rather than having to rely on a judge to make their asset distribution decisions for them.
Source: barrons.com, “Protect Your Clients During ‘Divorce Season’“, Sept. 22, 2017