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Tag Archives: Property Division

Capital Gains Tax Considerations For Divorcing Couples

Divorcing couples in New Jersey and around the country are often eager to put the past behind them and begin anew, but rushing through property division and spousal support negotiations can have unintended consequences even when discussions are cordial and the couple involved see eye-to eye on major issues. Few things cause divorced spouses more anxiety and stress than being dragged back into disputes that they thought had been settled long ago, but that is what can happen when divorce agreements are entered into without considering future tax implications.

New Jersey law calls for the equitable distribution of marital property, and it allows spouses who are seeking a clean break to surrender their rights to assets such as real estate or investment portfolios in return for their husbands or wives agreeing to not seek spousal support. However, changes in federal tax laws could make this kind of arrangement extremely expensive for the recipient spouse if the assets concerned have appreciated significantly since being acquired.

Tax laws have always required capital gains tax to be paid when such assets are sold for a profit, but these taxes must now be paid based upon the value of the asset at its time of acquisition rather than its value at the time of the divorce settlement. This does not mean that such agreements should no longer be entered into, but it does make prudent tax planning extremely important in these situations.

To navigate around this problem, experienced family law attorneys may suggest adding additional assets to offset this tax liability or altering the value of the assets concerned to reflect their worth after any applicable taxes have been paid. Attorneys could also recommend adding provisions to divorce agreements that require spouses who surrender their rights to assets that have appreciated considerably to reimburse their former husbands or wives for any taxes that become due should the assets in question be sold.

Understanding How Bankruptcy Affects Divorce

Many New Jersey marriages falter due to financial problems. When people who are in this situation want to seek a divorce as well as file for bankruptcy, they should be careful about the order in which they proceed. There are several different scenarios that can affect the filing order for these two types of matters.… Continue Reading

Appraising The Home For The Divorce

A contentious divorce in New Jersey may well go to trial. If the departing spouses cannot come to agreement about the division of property, then the intervention of the court may be necessary. In order for a judge, who will almost certainly have no personal knowledge of the divorcing couple whatsoever, to make a reasonable… Continue Reading

Fraudulant Activity Related To Divorce

New Jersey couples who are going through a divorce understand that knowing what assets make up the marital property is essential for purposes of property division. Depending on the circumstances, some assets may be hard to find. This lack of transparency might cause a problem when attempting to divide property appropriately. There are ways to… Continue Reading

Divorce Cases And Complex Asset Disclosure

New Jersey residents may be interested in the divorce case of a New York man who is refusing to disclose his alleged earnings from a Brooklyn property sale in 2009. The New York Court of Appeals heard the man’s argument in 2015, and his attorney claims that he has the right to refuse to testify.… Continue Reading

Actor Terrence Howards Divorce Settlement Overturned

A judge recently overturned a divorce settlement between actor Terrence Howard and his second wife, Michelle Ghent. The judge ruled that Howard was coerced into the settlement. Howard argued that Ghent threatened to leak private details about him if he refused to sign the settlement. The private details included a video of Howard dancing naked… Continue Reading

How Is Inheritance Factored Into Property Division

Property division is one of the biggest factors for divorcing couples. It is important that you know your legal rights and what assets are considered joint within the marriage. It is common for one spouse to acquire property or funds through inheritance. For example, when the family member of one spouse passes away, that person… Continue Reading

Equitable Distribution Of Property May Not Be Equal In New Jersey

The title of the movie “Yours, Mine and Ours” pretty accurately summarizes equitable distribution laws in New Jersey. Unlike community property states in which pretty much everything a couple owns is treated as being joint property in the event of a divorce, equitable distribution classifies some property as separate and some of it as marital.… Continue Reading

What Are Some Considerations For A Prenuptial Agreement

The use of prenuptial agreements in New Jersey is not a controversial topic these days. Indeed, the state law governing the use of such agreements dates back to the 1980s. What this means is that if you want to enter into a prenuptial agreement, your ability to do so will not be the possible subject… Continue Reading

How Courts Value Businesses When Dividing Property

When a couple gets divorced, dividing up their property and assets can be complicated. New Jersey is an equitable distribution state. This means that a judge will determine what is fair or equitable in dividing up property, instead of splitting the property in half. If one or both spouses own a business or have a… Continue Reading

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