Sunday, June 23, 2024

Financial Decisions to Consider When Filing for Divorce

Filing for divorce can be a very difficult decision. This involves dividing shared assets and financial responsibilities along with the dissolution of the marriage. This can be a very challenging time for both partners of the marriage.

The first thing you need to consider is the joint finances

You will need to create an inventory detailing the liabilities, shared accounts and assets. You need to have accurate and updated information so that you can make informed decisions when it comes to court proceedings or negotiations. You will also need to collect financial documents such as tax returns, bank statements, mortgage documents etc. An important financial decision in divorce proceedings is spousal support. This is also called alimony. The length of the marriage will be considered by the court as well as the earning capacity of each partner. They will consider the standard of living the couple has been used to during the marriage.  These factors will decide the paying or receiving party. If you have children, you can consult with child custody lawyers. Some of the important information your lawyers will need are the income of each parent, expenses for childcare and the standard of living of the child. This will help to calculate child support.

The marital property has to be equitably distributed

There are assets and debts that you and your partner have accrued during the length of your marriage and this division needs to be fair. There can be vehicles, real estate, personal belongings and investments when it comes to diving property. The value of each item has to be considered and its significance to the partners has to be assessed. Your retirement savings can be affected by divorce considerably. Your divorce lawyer will help explain how your retirement accounts will need to be divided. A financial advisor can also be helpful in this regard. This way, your retirement planning and long term financial goals can still be preserved. There are tax consequences of divorce as well. There are tax implications for transferring assets and this has to be assessed carefully. You can obtain the advice of a tax professional in this situation so that you can minimise your tax liabilities and have a better financial position.

There is an impact on your health insurance and other benefits as well

One spouse can lose coverage under the other spouse’s employer sponsored health insurance plan once they get divorced. So you will need to make a plan for alternative options for insurance coverage. This will require you to think about changes in your healthcare costs. You will need to plan for this carefully in order to ensure financial stability. As mentioned above, you will need to address alimony, proper division, child support, joint finances, insurance benefits, tax implications and retirement accounts. You can always obtain the advice and guidance of professionals so that you can make informed decisions regarding these aspects. This will help you better safeguard your financial health. And you can work towards a fair resolution for both parties.

Jodi Davis
the authorJodi Davis