Other than custody of a couple’s children, finances are often the most important aspect of any Utah divorce. The division of a couple’s assets and debts takes up a significant amount of time in a divorce. This is usually because both parties are attempting to ensure the stability of their financial futures now that their marriage is over. However, without a clear picture of family finances, negotiating a fair and equitable settlement may not be possible.
Divorce preparations need to begin with the gathering of information on a couple’s assets and liabilities. Deeds, mortgage documents and account statements, along with tax returns for at least the last five years, will help paint a financial picture. It is also important to accurately gather information concerning a couple’s debts, as they too will be divided.
Of course, it would be best if a couple’s debts were paid off prior to a divorce, but that is rarely possible. When debts cannot be paid in full, spouses should consider refinancing those debts, leaving only the name of the spouse taking responsibility. Creditors are not bound by what a divorce decree says. Therefore, if one spouse fails to pay the debts to which he or she agreed in the divorce, creditors may look to the other spouse for payment.
Couples going through a divorce also need to understand that not all assets are created equal. Even if two assets are assigned the same current value, such as a house and a retirement account, that does not mean their value is actually the same. The decision on which one to keep and which one to turn over to one’s spouse should be made carefully, keeping tax implications and future growth in value in mind.
Going into settlement negotiations without understanding certain nuances could result in a divorce settlement that is not as fair and equitable as first believed. A Utah resident’s financial future could be put in jeopardy, and he or she may not realize it until it is too late. It may take the assistance and advice of someone knowledgeable in the division of assets to help avoid that eventuality.
Source: Wicked Local Hopkinton, MA, “DOLLARS AND SENSE: Five financial considerations when going through divorce“, Alan Auteri Hopkinton, Dec. 7, 2014