Author: editor

You’ve decided to sell your home, now what? There are many reasons individuals look to sell their homes. But one of the biggest reasons is divorce. With a divorce, comes the separation of goods, custody battles, and other factors. Whether it’s a clean break or not, there are many factors that can go wrong when selling your home.

As if separation and divorce weren’t stressful enough, couples can really mess things up when selling their matrimonial home during a separation. Chances are the matrimonial home is one of the largest assets the couple has and if not done correctly, one or both parties to the separation can incur serious adverse tax consequences when selling their matrimonial home.

According to the Centers for Disease Control and Prevention, there are 827,261 divorces and separations worldwide every year, and of those thousands of people, chances are you know someone who may have to sell their home during this time. With professionals like Mark from Accounting for Divorce by your side, you can anticipate any shortcomings before they occur to set yourself up for success throughout the selling home process.

A few issues to consider and questions that arise when selling the matrimonial home:

1. Does a marriage contract exist stipulating how the matrimonial home is to be divided upon a separation/divorce?
2. Is the matrimonial home the only property owned by the separating spouses?
3. Is there a second property that perhaps could be the matrimonial home? 4) Has there been a material increase or decrease in the value of the matrimonial home from the date of separation to the date of it being sold?
4. What are the Principal Residence Exemption rules; how do they apply in a separation/divorce and do both parties qualify to claim this exemption?
5. Who is responsible for the payment of the operating costs of the matrimonial home before its disposition?

No doubt that selling your home during a separation/divorce is a difficult process that brings many questions to be addressed. Our team at Accounting for Divorce is well experienced in the issues that arise during the sale of the matrimonial home and are available to provide advice to you and your family law lawyer, in advance of a sale, to ensure that you have considered all the issues involved and hopefully avoid any unwanted surprises upon the sale. For more information click here

Going through a divorce can be stressful, overwhelming and quite often traumatic.  With so many moving parts to figure out, determining your Net Family Property (NFP) is a critical step, and usually the first one, in the process of separating the finances between divorcing parties.  The timely and accurate completion of your NFP and equalization will greatly assist you and your lawyer in the separation journey. 

What is a financial statement? 

A financial statement is a legal document created individually and independently by each party in the divorce.  Once completed, the document will calculate your NFP which is used to determine the equalization of your matrimonial assets as well as be a source of determining both child and spousal support.

The statement must be as accurate and complete as possible.  

What information is reported on the financial statement? 

There is a great deal of information contained within the financial statement.  The statement requires you to list out many items both at the date of marriage and at the date of separation.  The main categories of items reported on the statement are:

• Your annual income
• Your assets at marriage and separation
• Your debts at marriage and separation
• Any gifts or inheritances received during the marriage
• Your annual expenses and living costs

Having backup and documentation which supports the amounts you report on your financial statement will assist you and your lawyer in expediting the negotiations with your spouse and will add credibility to you should your case end up in court and your documentation is reviewed by a judge. 

Things to Consider

• Do not rely on your spouse and/or their lawyer to prepare your financial statement for you – Do it yourself!
• You will be signing the financial statement stating it is true, accurate and complete – be sure it is!
• Emotions are high during the separation and divorce process – be sure to park your emotions and prepare your statement based on the facts!

Financial statements may seem overwhelming, however, our team at Accounting for Divorce is here to help.  With over 30 years of experience in accounting and taxation, Mark has helped many clients throughout their separation and divorce.  As a Certified Divorce Financial Analyst, (CDFA), Mark is able to offer hands-on and practical advice during the separation process.  To learn more about AFD and the services offered by Mark give us a call at 416-258-4885.