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Will you lose it all in divorce?

On Behalf of | Jun 26, 2024 | Property Division

Imagine building a thriving business, investing in your future and securing a comfortable retirement, only to face the prospect of losing it all in a divorce.

As you navigate the legal complexities such a challenging time, understanding how to protect your assets is crucial. This rings especially true in equitable distribution states like New Jersey, where the court will divide your marital properties fairly—but not necessarily equally. By knowing how to protect your assets, you can ensure a more secure financial future and avoid costly mistakes that could have long-term consequences.

Know your assets’ worth

One of the most critical aspects of asset division in a divorce is accurate valuation. This includes not only determining the value of tangible assets like real estate and vehicles but also intangible assets like stock options, retirement accounts and business interests. You may consider enlisting the help of appraisers to determine the accurate value of complex assets.

Understand tax implications

In New Jersey, the tax implications of asset division can be complex and far-reaching, with potential consequences for income, capital gains and estate taxes. For example, if you receive a larger share of marital assets, you may be liable for more taxes. On the other hand, if you receive a smaller share, you may be eligible for a lower tax bracket. It is essential to consult with a tax professional or financial advisor to develop a strategy that minimizes tax liabilities.

Uncover hidden assets

Unfortunately, the concealment of assets is not a rare occurrence in a divorce, especially if it involves high-value assets. A spouse may attempt to hide assets or income to avoid dividing them in the divorce. This can include secret bank accounts, hidden investments or unreported income.

Remember to be vigilant and proactive to protect yourself from hidden assets. Start by gathering financial documents and records, including bank statements, investment accounts and tax returns. You may also want to work with a forensic accountant or financial expert to identify potential hidden assets.

Divorce is a pivotal moment in anyone’s life, bringing significant changes that can turn your world upside down. Yet, this turning point also marks the beginning of a new chapter – one of financial independence – and it is crucial to start this chapter on the right foot.