A divorce gives rise to various disputes and issues of conflict. What you may have yet to realize is that those complexities can multiply when you have substantial assets on the line. All your marital assets are subject to an equitable distribution in New Jersey. However, what is fair in the eyes of the court may not be fair to you. If you are getting ready to negotiate a settlement with your spouse, here are the complications you should prepare for:
Asset identification, classification and valuation
The assets you have earned and acquired before your marriage belong to you because these are legally your separate property. However, if you have commingled your separate assets with those you acquired during your marriage, it could be part of your marital property. Therefore, you must identify every personal and real property you own and distinguish them from those you jointly own with your spouse. The problem is when you own complex assets, such as the following:
- Businesses or business shares
- Pensions and retirement accounts
- Real estate
- Jewelry and artwork
- Trusts and inheritances
- Intellectual property
The values of the assets above fluctuate with the market and economy, and they can generate income in the future. In such cases, you could get a professional valuation to determine the fair value of each asset before dividing them with your former spouse.
Dividing and transferring high-value assets can have considerable tax implications in the present or when you sell them later on, such as capital gains tax. Child support and alimony are not tax-deductible if you are the one paying them. You must understand how taxes play a role in asset division so you can prevent unexpected liabilities.
Alimony and child support
Your marital standard of living will also affect the division in New Jersey, especially if the income disparity between you and your spouse is significant. Depending on the situation, the court could award either of you with child support or alimony.
Hiding assets might seem like a clever way to preserve your wealth, but you should know that it is unethical and illegal in New Jersey. Conversely, the division of assets proceeding may trigger your spouse to conceal certain finances from you and deprive you of your fair share.
Marital dissolution is not just emotional turmoil but also a tortuous and complex journey through the division of your valuable assets. It would be wise to seek the guidance and advice of professionals to help you.