For many Virginia residents, going through a divorce can be a difficult process especially if they have amassed a number of marital assets. When they have decided to end their marriage, they will need to determine which former spouse gets what. It is important to note, however, that there are financial implications to keeping certain assets.
One major marital asset that one or both individuals may be interested in keeping is the family home. Once the divorce is finalized, the person who keeps the family home will suddenly be responsible for the home’s upkeep on a single income. Further, the person who keeps the home likely has to give up other valuable, and often liquid, assets. For example, a person might exchange a bank or brokerage account in order to keep the home. That person now has a piece of property that will require more money to keep its value up while the other person has access to cash.
Those who are going through a divorce should also consider the tax implications of certain assets. For example, a 401(k) plan account and a checking account that are both worth $100,000 are actually not the same due to taxes. A person who takes cash out of a checking account will not have to pay taxes. On the other hand, a person who makes a withdrawal from a 401(k) account will have the amount taxed as income.
Although going through a divorce is never easy, some couples can reach an accord outside of court with collaborative family law processes. In other cases, they can ask their respective attorneys to take the lead in negotiating a comprehensive settlement agreement.