As if the emotions surrounding a divorce aren’t painful enough, property division for Alabama couples can be contentious and filled with drama. From deciding how much money one spouse poured into a new startup, to not knowing if that priceless antique belonged to your spouse or if you purchased it after you got married, the rules surrounding marital property can be tricky.
But where the more obvious items like vehicles, the family home, or retirement accounts are at the top of the list, one or both spouses may overlook many other valuables that they forgot about or did not realize could end up divisible. For residents of Montgomery and surrounding areas, it is important to have a plan when you are going into negotiations with your soon-to-be ex.
Realizing current and future assets
As Alabama is an equitable distribution state, a judge will look at the total marital assets and debt and decide on a fair, but not always equal, division of property in divorce. When preparing the inventory of marital assets, both spouses should be mindful of both present and future holdings so as not to overlook hidden assets.
If they have children, parents most likely have set aside a college fund such as a 529 college savings plan. The parent who opened the account is the account holder and may withdrawal funds at any time, even if the child is the beneficiary. As children over age 18 will likely not be eligible to receive child support payments, discussing these funds and what they are for is important to your child’s future.
Stock options that may hold little value now may be priceless later. Finding out if your spouse has these through their company may require a request for full discovery of their employee benefits. Although this procedure is expensive and takes time, it is well worth the wait, especially if the company has provisions to hold the non-employee spouse’s share of options.
If the spouses were filing jointly but now are filing separately, the tax burden may be unequal when it comes to capital loss carryovers. Capital losses from previous years should carry forward until fully deducted, so if both spouses incurred the losses on joint returns, the carryover should be divided equally during property division.
Finally, giving up a country club membership may seem reasonable for the spouse who no longer wanted to pay monthly fees. What many people do not realize is that this is an asset that the courts will view as divisible. Although it may be difficult to sell, it is an investment that should show up on the inventory of assets.