Divorce Property Split
Divorce Papers > Property Divorce > Divorce Property Split
When a couple is executing a divorce property split, they need not feel that they may arrange a fire sale and accept meager proceeds for distribution between them. If some particular methods are observed, they can retain the property and gain a handsome amount of money. Generally, both spouses realize that both of them would be impacted by this split and hence they are cooperative and civil towards one another.
Tactics for Divorce Property Split
- The parents have the right to transfer assets to their children. For example, the residence can be transferred in the child's name. Due to this, the children can stay in the parental residence. The result is that the children need not change their lifestyle and two quarrelling individuals learn to prioritize their child
- The partners can include a point in the agreement that they would liquidate the property if one of the following circumstances are fulfilled
- The cost of living index attains a certain value
- One of the partners faces a decrement in salary or loses a job
- The stock reaches a specific value
- The market index attains a particular level
- In order to ascertain that the split is fair and equitable, one partner might have to offer non marital property like gifts, inheritances etc
- Let us assume that an active ex-partner runs a business and is the director. Then, the inactive ex-spouse may be offered non-voting shares that are equal to the percentage mentioned in the divorce settlement. This would keep the rights of the inactive partner intact
- The partners seeking divorce can transfer the property to a divorce trust. Often, the trustee is an outsider, for example an attorney. The disadvantage of this method is that the trustee can levy a fee for the services. This trustee is a guardian for both partners. If any partner is favored over the other, this fiduciary (i.e. the trustee) can be held responsible
- A FLIP (Family Limited Partnership) is an underused but pragmatic form of ownership in divorce. It is acknowledged by the Internal Revenue Code. In this method, one partner is given all rights to manage the asset and he/she is termed as the general partner. Both the partners are named as limited partners and have beneficial ownership of the assets. As the general partner inputs management efforts, he/she is provided a stipend by the FLIP
- It is usually observed that couples seeking divorce own property that has scant present value, but it might appreciate. Some examples are a fledgling company, a work of a new artist etc. The remedy is that this couple should retain such property and simultaneously accede with each other that they would revaluate it after each year. If an appreciation takes place, the couple can sell the property and split the proceeds
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