Financial problems can result in a divorce for some people in Pittsburgh, and those issues may be a part of the divorce process as well. One problem some people may encounter is they may not have been very involved in the family finances. Those individuals should make sure they know what assets each spouse has individually and what they own jointly as well as how to access them.
To protect their assets, people should understand that selling, dividing or exiting from certain investments early can incur penalties and taxes. For example, to divide a 401(k) or a 403(b), they will need to have a professional prepare a document called a qualified domestic relations order. For an IRA, it is usually necessary to have a divorce decree. The money will then need to be rolled into new IRAs to avoid taxes. When looking at the value of these assets, it is important to note whether there are penalties for early withdrawal and whether there will be a tax on distributions.
If securities are sold, there could be capital gains taxes. Another consideration is where the market is and whether it is a good time to sell. Once the divorce is final, ex-spouses may also want to remove one another as beneficiaries on accounts.
An attorney may help a person develop a strategy for going into negotiations about property division. For example, a better solution than splitting or selling all assets might be for one person to keep certain assets and the other to keep some of equal value. If one of those assets is a home, it is important that the person who keeps it is able to afford the mortgage, upkeep and taxes on a single income. The home might also need to be refinanced.