Divorce is first and foremost about a fresh start; an individual often finds himself or herself at the end of something that is no longer working and at the beginning of something new and exciting. But while the goal is a fresh start, the divorce process is often about money, or, rather, how to split up the couples’ assets.
That process requires a dizzying array of decisions from the consequential (like what to do with the house) to the mundane (who gets the plastic dishes). Along the way, a number of important marital assets commonly are left out of the equation.
A surprising marital asset that is often forgotten is benefits from previous employers such as stocks, retirement accounts and deferred compensation plans. Any divorce checklist should include these items.
Along similar lines are retained earnings. These are slices of corporate income retained by the corporation rather than passed along to shareholders in the form of dividends. This is particularly important to watch out for when one spouse owns a business.
Another more technical asset is capital loss carryover. In simpler terms, capital loss carryover is a tax mechanism that allows a person (or couple) to carry over their capital losses from the current year into future ones. This strategy is often useful because it permits the beneficiary of the mechanism to reduce his or her tax liability, sometimes significantly. As a result, it should be treated as a potentially valuable asset when splitting up marital assets.
An additional tax asset to consider is the tax refund. Depending on when the divorce settlement takes place, and how long it goes on, pending or past tax refunds may be in play.
And, finally, don’t forget about travel reward program points. These can be worth a nice trip to the person who keeps them, and they have value that can be divided.
Source: Forbes, “Divorcing Women: Don’t Forget These Marital Assets,” Jeff Landers, Oct. 16, 2013