The idea of a divorce in New Jersey is never easy to contemplate. A frequent contributor to stress is brought on by concern about post-divorce finances. While that is certainly a valid issue, having an understanding of what is involved with one’s finances can be helpful.
Finances can be broken down into four main categories: assets, liabilities, income and expenses. Assets consist predominantly of funds that have a cash value. Examples include checking and savings accounts, retirement accounts, stocks and bonds, and retirement accounts, to name a few. When dividing assets one may want to take into consideration the tax implications of different accounts.
Retirement accounts are typically taxed when withdrawals begin. So if one spouse takes a $100,000 money market account and the other spouse takes a $100,000 retirement account, it may appear to be an even split of assets. But the retirement account will be taxed later, and if the recipient is paying a 25 per cent tax rate, he or she will only realize $75,000 from the asset.
When a person in New Jersey is contemplating a divorce, he or she could benefit by having a firm understanding of the financial situation going into the proceedings. An experienced family law attorney can review a person’s financial status and help to put one at ease regarding finances. A knowledgeable professional can advise a client on steps that may be taken to better prepare for financial stability following a divorce. An experienced lawyer can also bring a calming and detached presence to what can be a very emotional situation.