The longer couples are married, the more entangled their finances get. And as some Texas couples will experience, dividing these assets if the marriage does not work out can be a delicate and complex process. There are also a lot of details to focus on, which can if ignored, negatively affect your financial plans after the divorce is final.
Separate all joint accounts
There are several types of accounts that spouses might own jointly, and which will need to be divided, closed or changed during the process. Depending on the type of account, the procedure to separate them might be range from simple to very difficult. Some of the accounts to look at include:
- Savings and investment accounts
- Retirement accounts
- Loans and credit cards
Simpler joint accounts, such as savings accounts, can be closed, and their value divided between the spouses. For many retirement accounts, such as 401(k)s, the court will issue a qualified domestic relations order establishing the division of the account. Loans and credit cards might be somewhat more challenging. If the credit cards are jointly owned, they will need to be paid off and closed. If one of the spouses is only an authorized user, they might remove themselves from the account or the account holder might choose to do it for them.
The family home and its considerations
The family home is often the most valuable asset to be divided. Deciding what to do with it is very important. For the couples, choices range between one spouse assuming the existing mortgage or applying for a new mortgage of their own or selling the home and splitting any proceeds left after the mortgage is paid off.
Many of these decisions will also have tax implications. This is something you should review and consider as you make each decision during the division of assets process.