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Potential errors in splitting assets during divorce

Georgia couples who are getting a divorce may have various approaches to splitting property, but it is important for each person to understand the value of assets and avoid common mistakes. Alimony and child support recipients may also want to guard against the potential loss of income by taking out a life insurance policy on the payer.

Many people may want to keep the family home and let the other party take a more liquid asset such as a checking account. However, in calculating the value of each asset, it is important to account for the cost of maintenance on the house. Furthermore, a person should make sure it is possible to do the needed upkeep on the home with just one income.

Other errors relate to taxes. People may not realize that splitting a 401(k) requires a qualified domestic relations order. This is necessary to allow money to be withdrawn from the 401(k) without a penalty, and within 60 days, the withdrawn sum has to be rolled into an individual retirement account. People who keep a 401(k) while a spouse takes a checking account of equal value should make sure that they account for the fact that while the checking account can be used freely, withdrawals from the 401(k) will incur a tax.

In a high-asset divorce, property division may become particularly complex. For example, if one spouse owned a business, the other spouse may have a claim on it. Complex investments, real estate located in other states or other countries and valuable art or antique collections may all complicate the process of property division. Despite these complications, the couple may want to try to negotiate a property division settlement agreement instead of turning to litigation since it keeps them more in control of the outcome. They might want to have the assistance of their respective attorneys when doing so.

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