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What is the most common property division mistake?

On Behalf of | Feb 5, 2021 | Divorce

The property division portion of your divorce is likely to be the most difficult since it involves a lot of financial information. It can be complex and tough to work this out in a way that is fair and acceptable by the court. 

While you may wish to rush through this process, that could lead you to make one of the biggest mistakes that will come back to haunt you. According to CNBC, the most common mistake couples make concerning property division is not considering the financial implication for the future. 

Future impact

While you are in the middle of a divorce, your goal is often to just get it over with. You may give little thought to what happens when you do finish, and this can lead to regrets. 

You should always keep an eye on the future. Consider how the decisions you make right now will play out in a year, five years or even longer down the road. If you fail to do this, you could set yourself up for financial issues. 

Tips to help

There are a few things that you should do to help avoid making a mistake with your property division agreement. The first is to make sure that you assess the value of assets properly. You need to consider every aspect of the asset, including taxes. 

Taxation can greatly change the value of an asset. The best example is when it comes to retirement accounts. The penalties and taxes on these accounts can be stiff if you do not pay attention to the rules about the disbursement and collection from these accounts. 

Another thing to keep in mind that could impact the value of an asset is your plans for that asset. For example, if you want the family home, you need to be aware that the value can change significantly. If you do not plan to keep it long and want to sell it, you are mainly at the mercy of the market. You have no way to know if you can get the money out of it that you think you can at the time you go to sell. Plus, you also need to factor in the costs of upkeep for the home, which will reduce how much it is worth to you in the end.