A crucial component of any Illinois divorce is dividing the spouses’ assets and debts. For many couples, the assets division process initially seems straightforward. However, the process often becomes much more complex than spouses expect. Tax implications, commingled assets, property with fluctuating value, and other complications can make property division one of the most challenging aspects of divorce. Furthermore, the consequences of property division can have a major impact on the parties for years or even decades after the split. If you are planning to divorce, make sure to be aware of common mistakes during the property division process and how to avoid falling victim to the same missteps.
Miscalculating the Value of Your Assets
Spouses who can divide property through an out-of-court agreement can save money and stress. However, when you make your own decisions about who gets what in the divorce, miscalculating the value of the assets can lead to a grossly uneven split. For example, you may decide to simply split your retirement funds 50/50 with your spouse only to suffer an early withdrawal penalty that reduces the value of the retirement asset. You may fight to keep the vacation home or only to realize years later that you cannot afford the home’s upkeep. You must also consider the tax consequences of any property you retain.
Assets with fluctuating values can also complicate the process. Cryptocurrency is becoming increasingly relevant in divorce proceedings. Because digital currency can vary dramatically in value from day to day, you must decide how to account for this fluctuating value during asset division. Stocks, stock options, and other investments with variable value can be nearly impossible to properly value without an expert opinion.
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