When a couple decides to divorce, one of the toughest sets of decisions to work through is who gets what. During the marriage, the couple may have acquired assets together or a dependent spouse might have made sacrifices for the breadwinner spouse to advance in his or her career.
If the couple primarily owns intangible assets, then liquidation might become necessary. Dependent spouses, for instance, might love to hold on to stocks but need cash to pay bills now. Take into consideration some of the many liquidation issues that might arise throughout the divorce process.
Access to joint accounts
Business Insider recommends withdrawing some cash from joint accounts to pay for upcoming expenses. However, wiping out the account might present some problems. In fact, if the breadwinner spouse already has access to adequate cash and then withdraws money from the joint account, it might present problems for a dependent spouse, which might get dragged into court.
Some spouses are so eager to move on and split assets that they jump the gun. This might create tax-related consequences for either party. CNBC notes that liquidating assets often create taxable events, such as when selling stocks or dividing up the retirement accounts. Each asset type might get treated differently by tax agencies, so keep this in mind when requesting certain assets.
It is difficult to approach property division without bringing emotions to the table, especially when things like the family business go up for grabs. When couples can work together to keep most assets in their original forms, they might stand a better chance of maintaining fair access to cash and avoiding harsh tax penalties.