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Property division can be tricky with home, 401(k)

Now that summer is officially over and the kids are back in school for the fall, it is "official" divorce season. Going through the end of a marriage can understandably be financially challenging and emotionally confusing. However, a couple of tips may help with navigating this type of family law proceeding in Pennsylvania, specifically when dealing with property division issues.

One of the costliest mistakes one spouse can make during divorce is deciding to keep an expensive marital home. Many spouses choose to keep the family home for emotional reasons. However, the expenses to maintain the home may not be sustainable in the long term.

In addition, obtaining a court order is essential for accessing a portion of an ex-spouse's 401(k) plan. This court order is known as a qualified domestic relations order, or QDRO. Another move that may be personally beneficial following divorce is for spouses to take out life insurance policies on exes who are paying support. This is critical in that if the party obligated to pay child support passes away and their payments stop as a result, the life insurance proceeds can ensure that any children affected will continued to be cared for financially.

Property division can be a sticky aspect of any divorce proceeding in Pennsylvania, as two spouses may not readily see eye-to-eye on how their assets should be divided. However, if they are willing to find common ground, they may find it useful to engage in direct negotiations or mediation rather than going to trial. Otherwise, traditional divorce litigation will be necessary for sorting out their asset distribution issues, with a judge ultimately making the important decisions for them in this area.

Source: barrons.com, "Protect Your Clients During 'Divorce Season'", Sept. 22, 2017

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