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"For example, if the wife keeps a house with $500,000 equity, this asset generally has a gain exclusion," he said.

"If the husband keeps a 401(k) worth $500,000, he will sustain an unavoidable tax liability—one-third of it could go to taxes.

When a person passes away, the process of complying with the terms of the will is known as probate.

This legal process generally involves appointing an executor (typically named in the will) to manage the decedent’s estate.

"Each party in the divorce needs to understand how the liquidation may affect not only the next tax return but also their long-term financial future," she said.


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