If you’re working out your own divorce agreement instead of waiting for a judge to make arbitrary decisions on your behalf, you’ve taken control of your divorce and put yourself in a good position to move forward. However, you need to watch out for common mistakes.
In particular, be aware of five critical factors that people often overlook when they are developing a divorce agreement. Your divorce attorney should know to watch for these issues, but if not, you should be ready to bring them up and make sure you have a plan.
Make Sure You Account for All Your Assets
Over the course of time, we forget things. You or your spouse might have opened an account that’s been inactive for years. One of you might have money in a retirement plan at an old job. Your spouse might have purchased jewelry or collectibles that you don’t even know about.
Property acquired before your marriage is each spouse’s separate property in most cases. But anything earned or acquired after you got married should be divided equally under Nevada’s community property laws.
Some spouses will try to hide assets, while others simply forget. Do some investigating and hire a forensic accountant if you think your spouse might have squirreled away funds in an offshore account, third-party trust, or other device.
Watch for Hidden Debts
Looking for lost assets can be fun. Making sure you’ve found all of the debts in your name is not as enjoyable, but equally rewarding. Your name can be associated with a number of debts that you are unaware of because anything your spouse purchased on credit during your marriage usually becomes a liability for both spouses.
Get a copy of your credit report as soon as possible. Then ensure that every debt on the list is allocated properly in your divorce agreement. If a debt is in both names but really should belong to only one spouse (such as gifts for an extramarital partner), your attorney should negotiate to get your spouse to cover that debt because a judge would be likely to do the same.
Keep Aware of Tax Issues
Both you and your spouse will face tax consequences from the way you handle many assets and obligations in your divorce. It is a good idea for many couples to split the cost of consulting a financial professional to learn how to reduce your tax liability in the process. Also, remember to allocate any recent tax debts or refunds.
Factor for Inflation
Assets that you will not collect until the future or expenses that you agree to pay years down the line, will not be valued the same then as they would in today’s money. Remember to account for inflation when you are making future plans in your divorce agreement. For instance, if you agree to pay for college expenses for a child, check the statistics on the rising rates of tuition and fees to get an idea of what you will be facing.
Beware of Death or Default
If you are counting on receiving long-term payments from your ex as part of your divorce agreement, you may want to think twice. What would you do if your ex passed away before they’ve made many payments? What if your ex simply stopped paying? You might be better off instead accepting a smaller total amount but collecting it sooner.
Experienced Divorce Lawyers Protect All Your Interests in Divorce
At Naimi Family Law Group, we know the divorce process can be overwhelming, and it is hard to stay on top of every issue. We put our experience to work for clients to make sure they walk away from their divorce with the right terms to protect their interests and meet their future needs. Contact us today to learn how we can assist.