Don't Forget Taxes

• One of the biggest drains on the value of divorce settlement property is taxes. If you receive stocks or other investments to balance the value of other property received by your spouse, don't forget that you can be liable for capital gains taxes on the sale of those assets. If it's a short-term capital gain, the proceeds can be taxed at your normal marginal rate. Also, alimony is taxable as normal income for the receiver, but is tax-deductible for the payer.
  
  

Consider Liquidity

• In addition to taxes, consider the liquidity of the property you receive. You might get the house, but do you have the cash flow to make the tax and mortgage payments on it? If not, you could be forced to sell, which incurs additional costs. Savings accounts, some money market accounts and other cash-like investments are very liquid and can be used immediately. Retirement accounts can be liquid, but there's usually a penalty for early withdrawal. There's nothing wrong with illiquid assets, but account for the fact that the value of those assets is locked away and not readily available.
  
  

Debts

• Another crucial, but not immediately recognized, aspect of dividing marriage property and drafting the marriage settlement agreement is the division of debts. The same rules for dividing property (community or equity) apply to the division of debts. And, as with property, spouses can choose to trade and exchange debts. Thus, a spouse who receives a car out of the divorce settlement might not necessarily be responsible solely for the monthly payment unless that debt is explicitly assigned to her. If left to the court, it's not uncommon in equity property states for the breadwinning spouse to be assigned more debt than the other--even debts connected to property awarded to the other spouse. Creditors don't distinguish between the parties of jointly held debt, even in the presence of a marital agreement, so a failure to agree on the payment of all jointly held liabilities can have a negative impact on the credit rating of both spouses.