When it comes to divorce, asset division is one of the most complex tasks couples face. After determining the difference between shared and separate assets, couples must then decide who gets what when it comes to financial accounts property.
Despite these challenges, it is important to make smart decisions regarding your assets. Accordingly, Kiplinger offers the following tips on asset division and divorce.
Joint bank accounts & credit cards
Most banks do not allow you to remove a co-owner of an account. Instead, you will need to open a new personal account and divert your funds to it. You should also close existing co-owned accounts to completely disentangle your finances from your ex-spouse. As for jointly-owned credit cards, try to pay down the balance as soon as possible. Once you pay the balance, close the account and open a new one in your name.
If you take over the home after divorce, make sure home insurance reflects you as the owner. Even if you have an existing policy, you should make sure that it lists your name and not the name of your spouse. Car insurance information will also change if you and your ex are on the same policy. In this case, you can have a driver removed from an existing policy or implement a new policy to cover any new vehicles. As for life insurance, check your beneficiary designations and update accordingly.
Home titles & mortgages
For jointly-owned home titles, one spouse may need to come off if the other is getting the house in the divorce. Then there is the question of mortgages: you might need to seek out an entirely new home loan if the previous one featured both you and your spouse. If you choose to sell the home and split the proceeds, there is the issue of capital gains taxes. In this case, you must work out who is responsible for what amount of the taxes.
Asset division is complex, and you naturally want to get your fair share of marital assets. However, a little flexibility goes a long way when getting divorced, so do not hesitate to compromise when necessary.