Money Matters Divorcing Spouses Often Overlook
September 16, 2015
When going through a divorce, it is very important for both spouses to understand their post-divorce financial needs and their current financial situation. Often times during a marriage, only one person is the one in charge of the family’s finances and the other is unsure of where things are at. These items are often overlooked as part of the settlement process but are vital areas to address while going through a divorce.
Cash Flow Needs – Know your need for immediate cash flow for help with determining which assets would be most beneficial for you to receive in the divorce. Also, know what your income and expenses are on a monthly basis so you can make it month to month.
Joint Liabilities - Just because you split a liability doesn’t always mean that the lender will honor your property settlement agreement. Mortgages will need to be refinanced, outstanding tax liabilities will need to be paid and credit cards will need to be cancelled.
Taxes on Assets – While two assets or investment accounts may have equal dollar values, their economic value could be different when taxes are factored in.
Past Tax Returns – Review the past three to five years of returns you filed as a married couple. Aside from it showing you how much income you two had in a given year, you will see whether there are any assets you may be missing or if there are what are known as “tax assets” that need to be considered in the negotiation.
Division of Retirement Assets – These may represent a large portion of your net worth and you will want to make sure the intricacies of these transfers are handled with care and done correctly. A QDRO is needed for retirement plans attached to an employer. IRA’s can transfer with just a divorce decree, a statement, and a few signatures.
Digital Assets – This includes pictures and videos on your computer, tablet or phone. They may not have a large financial value but instead a high emotional one.
The bottom line is that you want to know what financial state you are in so that you can make decisions with all the information. Gather knowledge so that you are putting yourself on your own financial track to success.
Call our office at 763-231-9510 to schedule a free consultation with one of our Certified Divorce Financial Analysts to give you the financial divorce information you need to help you in your specific situation.
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