As I said I want to help them understand, a very clear understanding of their future financial picture. But while we’re going through the property settlement I like to explain that a dollar isn’t a dollar. There are differences. A dollar in a retirement in your retirement account is different than a dollar in your bank account. A dollar of equity in your home is different than the money that’s in your retirement account. So, we talk about where the resources are that are marital, how they might be divided and very importantly, what are the tax consequences related to receiving that asset?
If it’s the marital property, if it’s the primary residence, it may be the consequences of keeping the home versus the tax benefits enjoyed by two parties when selling a home. If it’s retirement assets it could be an understanding of the present value of what may be a benefit off in the future, like a pension plan or a corporate retirement plan. Part of the education is an understanding of what each dollar represents and the tax consequence related to it. But also an understanding of present value and the offset of receiving assets instead of support.
Dianne Nolin is a CFP with over 25 years of experience, and Sarah Schuler is an experienced practitioner of many aspects of family law in the Northern Virginia area.Back To Top