Property division is one of the most integral parts of a divorce. Due to its sensitivity, this issue can be complex. For this reason, the Hawaii State Judiciary provides residents with instructions and charts to ease the process.
Further, it is essential to pay attention to the steps you make during property division to avoid costly mistakes, such as:
1. Assuming assets of the same value are equal
Property valuation is necessary in a divorce. It is incorrect to believe two assets of the same value are equal. For instance, two real estate properties of the same value with different tax rates are not equal.
Besides, a traditional and a Roth IRA of the same value are not equal. Roth IRA withdrawals are tax-free, but with a traditional IRA, you will pay taxes. It is crucial to understand this concept to make the right calls.
2. Co-owning a home after the divorce is over
Some couples decide to continue owning a home together, particularly if they have kids and that’s their primary house. While it works for some, it may be a mistake in certain circumstances. For instance, if a party responsible for paying the mortgage fails to do so, the other party may be held liable. Besides, if the issue persists, both their credit scores will be affected.
If you choose to give a home with its mortgage to your ex-spouse, remove your name from the property’s documents.
3. Being in a hurry to get through the process
The chances are you want to end the divorce process as soon as you can. However, this should not make you rush the property division. You may make hasty decisions that may disadvantage you. Take your time and work with experts, especially if you have a bigger marital estate.
Mistakes during property division in your divorce may cost significantly. Consider your options to ensure fair distribution of property.