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Financial issues complicate 2023 divorces

On Behalf of | Jan 26, 2023 | Divorce

After a relatively stable 2022, the national real estate market is in flux, stocks and bonds prices dropped and a recession is possible. This situation poses three complications for couples ending their marriages this year.

The family home

Post marriage ownership of the home may be one of the biggest complications in a divorce. There are other considerations besides emotion and sentimentality.

Calculate all the costs of home ownership. Determine how to divide the current value of the real estate.

You must also consider the home’s mortgage, taxes, insurance, maintenance and other long-term costs. Remember that one spouse will pay costs that were previously paid by the couple.

There are also tax consequences associated with a future sale. A single taxpayer may only exclude $250,000 of the capital gain. This exclusion is $500,000 for married couples.


Investments, especially the present value of a pension, may constitute more of your net worth than your house. The current market complicates matters. Bitcoin values, for example, have dropped.

Also, retirement funds can be complicated. The IRS rules governing retirement funds require legal agreements to divide this asset. Pensions are more complicated and the current higher interest rates lower the pension’s present-day value.

While negotiating with a spouse who has a substantial pension, it is important to properly value that asset and work out the best way to divide it. This may be through a qualified domestic relations order or a buyout.

Company valuations and options

Spouses typically do not have equal assets, income and income-earning potential, at least on paper. But current net worth may be deceiving because it may not include stock options, company valuations and future earnings.

It is important to have a proper assessment of these assets so these are included in a property division and a spouse does not have to liquidate their assets. Company stock options require special attention because these may be complicated.

Attorneys can provide options to spouses on property division and other divorce issues. They can help them gain information and assure that the divorce decree is fair and reasonable.