Things are not always as they seem

In reviewing a property settlement proposal made by one of my clients I realized the huge impact taxes can have on the equality of the division.  Transferring the marital residence to one spouse is not a sale for tax purposes but will be at some point in time.  If the house was purchased for $250 ten years ago and is now worth $800 there will be a capital gain of $550 of which only $250 is sheltered from tax.  If the house was sold when jointly owned $500 of the $550 would be tax free.  Big difference.

Same goes for the transfer of stocks, pensions and other financial assets.  If taxes are not considered the division of assets will not be equitable.

In your negotiations of the division of assets make sure your keep your eyes open and have the final split reviewed by an accountant or your financial adviser.

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