Mistakes made when dividing property during a divorce can lead to a needless waste of money. Especially when dividing a substantial amount of assets, the process can be complex. It’s necessary to consider the division of 401(k)s and other retirement accounts, global assets, businesses, and real estate holdings.
Any division could lead to tax consequences. This includes capital gains treatment. Recent tax code changes can also impact other considerations. For example, one Kiplinger article notes that tax code changes will lead to complications concerning alimony as certain tax breaks will no longer be available to alimony recipients. Changes to the federal tax code will also impact the division of retirement accounts.
Errors leading to financial complications
One divorce commentator speaks of the unintended consequences resulting from miscalculations. Often ramifications come about due to:
- Mistakes made when reporting child support and alimony payments
- Failing to account for all of the needs of the children during child support calculations
- Not considering whether to distribute cash rather than corporate stocks or other assets during the asset division
- Incorrect appraisals of real estate
- Inaccurate valuations of family-run businesses
- Errors in capital gains assessments
- Not accounting for taxes regarding retirement accounts
Kentucky courts will pay particular attention to the property division process. Such attention is in part due to the contention that these proceedings generate. It’s also because the process involves a variety of factors. Courts will look at the length of the marriage, the specific needs of the children, and the ability of each spouse to provide support for themselves.
But beyond legal determinations, the division of property and assets is complex. Mistakes that lead to needless expense or additional taxes serves no purpose for either spouse. As it is so important to get this right, the services of an experienced family law attorney are invaluable.