Splitting assets during a divorce in California can be a complex and emotional process, and it’s easy to make financial mistakes that can have long-term consequences. Here are some common mistakes to avoid when dividing assets during a divorce.
Not understanding the value of assets
It’s essential that you have a clear understanding of the value of all assets being divided, including property, investments and retirement accounts. This can help ensure that you share assets fairly and that both parties are aware of their financial position.
Failing to consider taxes
Splitting assets during a divorce can have tax implications, especially when it comes to retirement accounts and investments. Don’t forget to consider the tax consequences that come with asset division and seek the advice of a financial advisor or tax professional.
Not updating beneficiaries
Make sure to update the beneficiaries on any accounts, including insurance policies, retirement accounts and investment accounts. Failing to do so could result in assets being distributed to an unintended recipient.
Not properly valuing assets
It’s crucial that you properly value assets, such as a business or a retirement account, to ensure that they are divided fairly. This may require the assistance of a financial advisor or valuation expert.
Not considering future needs
Besides your current financial needs, you need to consider your future needs, such as retirement or your children’s education. This can help ensure that all parties are financially secure moving forward. Furthermore, you may consider selling your marital home, despite any emotional value that it carries.
Relying on verbal agreements
It’s critical that any agreements are put in writing, even if they are verbal. This can help prevent misunderstandings and protect both parties’ interests.
Make correct choices during a divorce
Splitting assets during a divorce can be a challenging process, but by avoiding these common mistakes, you can help ensure that the division of assets is fair and that both parties are financially secure moving forward.