When couples in Tennessee begin the process of divorce, they will begin negotiating and dividing the many parts of their married life. One of the most important and often most complex parts involves finances, including assets, debts and retirement accounts.
Dividing assets
Whether a couple has accumulated few or many assets, they will need to go through the process of dividing those assets. In some cases, the division will be done by the court, according to state law. In others, however, the two parties will negotiate a settlement dividing their assets. During this process, one spouse might give up a certain asset in exchange for another asset they truly want. The division of assets could also be tied to the division of debt.
Dividing debts
Debt is another thing couples often accumulate during marriage. But as marriage comes to an end, they will also have to figure out who owes what and how the responsibility of paying that debt will be divided. Starting over after divorce debt-free is a good idea, so if the couple can pay off their debts before the divorce, even if it means selling some assets to do so, they should consider this option. Other choices to address debt include:
- Choosing to take a larger amount of debt to receive a bigger portion of the assets
- Yielding additional assets to the ex-spouse so they take a larger amount of the marital debt
- Continuing to share the responsibility of paying off the debt, even after the divorce is final.
Retirement concerns
Even younger couples who might think retirement is far into the future should not overlook the financial impact retirement accounts can have on the division of property. Often, spouses will be entitled to part of the retirement benefit their spouse has earned during their years of marriage, even if that benefit will be paid later.