The divorce process has many traps for the unwary. Attorney Van Smith and his colleagues at Smith Strong, PLC understand these issues, and recognize the importance in following proactive steps to avoid these common mistakes that arise in the divorce process.
Avoid Providing Inaccurate Post-Judgment Instructions
It is important to make sure post-judgment instructions are specifically followed. For example, if the judgment says to “open an IRA account,” make sure the account is being funded by your own assets. In a recent case, it was discovered that a judgment ordered IRA was being funded by a beneficiary IRA created originally by the ex-spouse’s parents.
Do Not Ignore the Tax Consequences of Low-Cost-Basis Securities
In theory, it sounds like a good idea to retain a high proportion of low-cost basis stock in dividing assets amongst spouses. However, you would have to pay future taxes on unrealized gains, which could add up quickly leading the other spouse to have a more advantageous tax plan. Attorney Van Smith and his colleagues at Smith Strong, PLC have knowledge and experience in the division of assets and determining structured settlements.
Do Not Fail to Make a Budget for your New Home
It is important to make a budget for your new home post-divorce. Our team can provide you with a budget analysis prior to the divorce to help you avoid having to “down size” a few years after your divorce because of an inability to maintain costs associated with your life.
Liquidating and Repurchasing Portfolios
It is costly to liquidate and then repurchase a smaller portion of your portfolio of stocks and bonds. Attorney Van Smith and the other attorneys at Smith Strong, PLC can explain and provide an analysis for how marital securities can be split so you end up with a properly balanced portfolio.
Avoid Overlooking the Six-Year Rule
It is important to monitor time limits with property distribution following a divorce. Property transferred to an ex-spouse more than six years after the divorce may be subject to certain taxes. Van Smith and his staff can recommend Certified Public Accountants (CPA) to assist if this or other taxable collections are present in your divorce.
Attorney Van Smith and the other attorneys at Smith Strong, PLC can help you avoid these common mistakes in a divorce. Mr. Smith has a knowledgeable team of financial experts that can advise on tax consequences, rules about property division, and asset division, along with the other financial issues that arise in a divorce.
Special thanks to co-author and fellow researcher, Hayden-Anne Breedlove for her contribution with this article. Hayden-Anne Breedlove anticipates graduating from the University of Richmond School of Law in May of 2019.