A centerpiece of divorce settlement is the equitable division of the assets and debts of the marriage and the proper allocation of cash flow through child support and a period of spousal maintenance.  In a time where the economy, and perhaps even one’s  own career outlook face instability, caution must be used to avoid self-inflicted pain and the risk of an inequitable division of assets and debt.

Some key areas of concern include these common questions:

Should we sell the marital residence or should one of the parties retain it?

If the real estate market is in flux, fixing an asking price may be difficult, and timing the sale badly may cause the home to be sold for less than you would like. Do you delay the sale and hope for better times? If so, who carries the mortgage payment and other expenses in the meantime.

If one of the parties would like to purchase the residence, getting a reliable appraisal to fix a value while relying on sales prices captured in better times might be tough.  If the spouse’s job is at risk, obtaining a new mortgage may be difficult.

How do we divide investments, bank accounts and retirement assets?

Typically, liquid assets like bank accounts, mutual funds, and broker accounts will be valued as of the date that the divorce started or a separation or settlement agreement signed. If each asset is individually split, then each person will sustain the proportional gain or loss of a volatile asset. But in times of volatility, the value of some accounts may swing substantially during periods of time. Take care when trading assets (you keep your account and I will keep mine) to be sure that values are properly set, and that each party is assuming a particular asset alert to limitations on true value, access.

Note also that not all assets are treated the same by federal and state taxing authorities. Also, retirement assets sometimes have restrictions on when, and how the funds may be withdrawn.

How do we settle issues of child support and spousal maintenance if job prospects are unclear?

Take caution in agreeing to a long-term payment stream assuming a level of income that turbulent economic times may not allow you to sustain. Be careful to negotiate triggers for re-evaluation if possible. It will be very difficult to adjust a negotiated maintenance payment if one or both of the parties lose their job or other circumstances change, absent language in the agreement that provides for that possibility

Periods of unusual economic uncertainty give rise to these, and many other special considerations when navigating the intricacies of divorce. Be sure to consult a qualified and experienced expert with sufficient experience to be familiar with those  risks who are armed with  a variety of  options, who know the risks and the benefits of each choice..

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