Nashville, TN family law attorney Anne Hamer talks about how the division of complex assets impact taxes in a divorce. When advising clients on dividing complex estates—typically those with a variety of assets—Anne stresses the significance of considering the tax implications associated with each type of asset. She uses a clear example to illustrate this point: assets such as 401k or IRA accounts incur taxes upon withdrawal starting at age 72, whereas the value of a home is not subject to the same tax treatment.

Anne emphasizes that in estate division, the goal is not just to divide assets of equal financial value but to understand how taxes will affect them over time. For example, while one spouse might receive a $500,000 house and the other a $500,000 401k, the latter will eventually incur taxes upon withdrawal, unlike the house.

To ensure a fair division, Anne compiles all marital assets into a comprehensive balance sheet, detailing liabilities and estimating potential tax penalties. When assessing retirement plans, she routinely includes a 20% estimate for tax penalties to facilitate equitable comparisons. Anne underscores the importance of working with an attorney who fully grasps these asset implications to ensure clients receive an equitable distribution.