January 11, 2014 /24-7PressRelease/
-- The nation's capital may be smaller than any state but still sees its fair share of divorces with an average of 2.9 out of every 1,000 people getting divorced, according to 2011 data released by the Center for Disease Control. That means that every day there are people in and around Washington, D.C. that must determine how to divide marital assets
and liabilities in light of the end of a marriage.
The very nature of a divorce can be sad for all involved but when proper processes are not followed, the impact can grow in the form of lost assets. Taking care to follow some basic advice and steps will help to prevent such unnecessary losses.
Let percentages be your guide
If you and your almost-former-spouse are determining who will get what portion of a particular asset, you should always stipulate the split in terms of the percent of that asset's value each party will receive. Never identify specific dollar and cent amounts as this can lead to serious loss for one or both parties.
For illustration's sake, imagine you are dividing a retirement account
that has a value today of $120,000 and you agree that each person will take $60,000 from that account. Because the value of a retirement account is subject to change, this could put someone at risk. If on the day that the transfer of funds is supposed to take place, the account's value has dropped, somebody will be left with less than the intended amount.
If, however, from the very beginning, you and your spouse agree to split the account in half, which each of you receiving 50 percent, you will still receive a smaller dollar amount in the end but the distribution will still be equal between both of you, as originally planned.
Not just for retirement accounts
The concept of leveraging percentages instead of exact monetary figures can and should be applied when dividing other assets or even debts as well. These include:
- Bank accounts
- Life insurance policy values
- Stocks or bonds
- Residences or other real estate
In general, if you simply make yourself always think in terms of the portion of a particular asset or liability, you will always be safer in the long run.
The QDRO is a plus
Whenever you are processing any funds or related distribution as part of a divorce settlement, you should utilize the Qualified Domestic Relations Order. This ensures that tax agencies know the transaction is part of your divorce and not a creative way for you to take an early distribution, thus preventing them from assessing taxes or high penalties on the funds. This is truly one of the easiest ways for you to save yourself from big losses.
Work with experienced counsel
Make sure that your attorney is well-versed in not only basic matters but all in-depth nuances that can come into play during your divorce. Talking with your lawyer about the various ways that you can preserve as much of your current and future assets is one of the smartest discussions you can have with your divorce lawyer.
Visit us at dcdivorcelawyer.org/