When a couple in Illinois marries, they likely do so with excitement for the future. However, when they make the decision to divorce, some couples may also be eager to begin the next stage of their lives. Unfortunately, this could lead to some hasty decisions that do not fully consider all of the financial considerations of asset division.
For many couples, a large part of the divorce process — especially one that involves a great deal of assets — is property division. Couples are often tasked when ensuring the value and division of a wide variety of assets, including retirement accounts, real estate and investments. Unfortunately, even though two assets may seem to have similar values on the surface, the way they are taxed could significantly reduce their value.
For example, a traditional IRA and a Roth IRA may have the same balance. However, withdrawals from a Roth account will not be taxed, unlike those of a traditional one, ultimately meaning that the traditional IRA is worth less. Additionally, stocks that have earned a great deal of money could be subject to a large tax bill. Homes could also have important tax implications; for example, a married couple can deduct up to $500,000 on the profits of a home sale while a single person can deduct on $250,000.
Often, when it comes to property division in a divorce, taxes could have a significant impact on the final value of an asset. Carefully examining how the asset will be taxed can help ensure that a settlement is actually a fair one. A professional with experience with family law can help people in Illinois interested in beginning the next chapter of their lives fully understand how the value of any property obtained in a divorce will be impacted down the road.