Once your husband files for divorce, you must take steps to protect yourself. This doesn’t mean in the physical sense. Instead, you have to ensure that you protect your financial future. The property division settlement is the way that you do this. If you are going through mediation, you and your ex work together to determine the settlement. If this isn’t possible, the court determines how to handle the division. In either case, knowing what to expect and what to consider can help you to remain as stress free as possible.
#1: Valuation is key
Business assets, retirement accounts and other assets must go through the property division process. Many of the assets involved in a high-asset divorce require valuation to ensure that the division is equitable. Some assets, including pensions, might have a higher value than the current face value of the accounts. Valuation takes a host factors into account to determine what value is appropriate for the divorce case. Some assets, including real estate, might be easy to valuate. You may have to hire professionals to handle the valuation of complex assets, such as businesses.
#2: Don’t forget debts
The debts you amassed in the marriage must go through the property division process. These have special considerations. If your name is on an account, you are responsible for that account even if the divorce settlement notes that your ex is supposed to pay.
Creditors don’t have to abide by the terms of a divorce settlement because it is a civil matter. If your ex doesn’t pay as required, it can hit your credit report and the creditor can come after you for payment. Opening new credit card accounts or credit accounts and transferring the balance from jointly held cards might prevent issues. You can also use the proceeds from the sale of jointly held assets to cover debts.
#3: Get the proper paperwork
You must ensure you have the proper paperwork when a divorce involves pension plans and other retirement plans. A qualified domestic relations order (QRDO) is a complex legal matter. Accuracy is crucial in these because even a small mistake could lead to considerable issues. Approval by the judge and the plan administrator is necessary when a QRDO is necessary.
Make sure that if you are going through mediation that the agreement you sign includes all the points you discussed exactly as agreed. It is often difficult to have these orders changed once the court approves the agreement.