Don’t be blindsided by financial issues in divorce

Many New York married couples fight over money. If you’re currently preparing for a divorce, you might relate to spouses who have said that financial issues were a key factor in the breakdown of their relationships. It’s understandable that you’re looking forward to starting afresh and leaving all the squabbling behind.

That doesn’t mean, however, that you shouldn’t be concerned about financial issues once you file a petition for divorce. Many people encounter serious financial distress when they divorce, some of whom might have been able to avoid it if they had been better informed or prepared for litigation. By keeping several things in mind, you can be proactive in protecting your interests in court.

Remember that cash is different from value

New York is an equitable property state, which means the judge overseeing your case will determine how best to fairly split all marital assets between you and your ex. It’s imperative that you make sure you clearly understand the implications of certain financial issues. For instance, receiving cash isn’t the same as receiving a stock valued at the same amount.

Selling a stock means you might pay a capital gains tax, depending on how long you held the stock before selling it. This is why it’s important to consider your purchase price and your selling price, as well as any and all tax implications, in order to compare the value of a stock to a lump sum of cash.

Don’t get too excited about keeping a house unless you can afford it

As in most cases, your home is undoubtedly one of your largest marital assets. Avoid assuming, however, that if you get to keep the house, you’re getting a great deal. If the home is no longer under joint ownership, you may need to refinance your mortgage, which means you must qualify for a loan as an individual.

You might intend on selling your home, but, again, there may be significant tax implications involved in the transaction that you’ll want to be sure you’re aware of ahead of time. In fact, sometimes the best thing to do when selling is the goal is to sell it while you and your spouse are still co-owners because you may be eligible for a higher tax exclusion.

Protect your financial interests in a New York divorce

Property division, child support and alimony guidelines vary by state. To avoid serious financial crisis in a New York divorce, do some research before heading to court to make sure you clearly understand financial issues concerning child support, spousal support, retirement benefits, taxes and other important topics.

The more informed you are, the better able you might be to protect your interests and make sure you’re getting a fair settlement before you sign an agreement.