Family Law Blog
Colorado Attorneys - Kaplan Law, LLC
Future Tax Implications Should Always Be Considered in Colorado Divorce Cases
By Denver Divorce Lawyer on September 29, 2010
A recent article in The Boston Globe discusses the significant impact that division of property can have on a divorcing individual’s financial well being. That is, while many couples filing for divorce often consider a 50/50 split to be the most fair and logical division of the assets, such an approach should only be considered if all details, particularly tax details, are fully examined prior to any decisions becoming officially binding. To ensure this, it is recommended that divorcing couples retain the services of divorce attorneys who have experience handling divorce cases in which division of assets being equally split is not in the best interest of both parties.
According to the article, consideration is often given to how much an item is worth. However, divorcing couples often disregard the fact that tax exemptions are different for single people than they are for married couples. As an example, the article presents the hypothetical situation of a house that has appreciated in value. As a couple, the amount of tax exemption is substantially greater than the exemption would be for a single person. Therefore, if a house that has appreciated in value is sold, a married couple may be able to realize, hypothetically, $500,000 of gains, while a single filer may only be able to realize, say, $250,000 of gains. If appreciation is greater than the allowed exemption amount, then a substantial amount of tax will have to be paid on the house, which could have been prevented had the divorcing husband and wife remained co-owners of the property, and thus exempt from a greater amount of taxes.
Regardless of the sentiment felt between two divorcing parties, it is essential that all financial matters, particularly those that don’t immediately impact either party (such as appreciated stock portfolios that have yet to be sold) are thoroughly examined to determine the most logical decision to be made regarding their sale in the future. At Kaplan Law, LLC, our Colorado property division attorneys will ensure that all details pertaining to your assets and property are taken into careful consideration during your divorce proceedings. For more information, please contact a Colorado Springs divorce attorney today at 1-877-527-5260.
