Protecting Your Financial Future During Divorce
Very few people spend their marriages labeling things “his” and “hers.” You shared everything with your spouse: home, furniture, appliances, children — even your ambitions. Maybe one spouse went to school or worked while the other stayed home with the kids. You probably brought in different assets and accrued debts together. Now that you face divorce, you must figure out how to divide everything.
Property division is one of the most stressful parts of every divorce. There are steps, however, that you can take today to protect your financial future.
Many people go into divorce not knowing how much money their spouse actually has. Now is the time to figure this out. Bank accounts, credit card accounts, insurance policies, tax returns, pension plans and other financial accounts all have financial statements that you can look at to get a feel for what financial assets are on the table.
However, in some divorces, there may also be assets off the table. Do you suspect that your spouse is hiding assets from you? An experienced divorce attorney can help you uncover assets hidden through offshore accounts, falsified documents, delayed bonuses and business contracts, shielded business income, illegal money transfers and other illegal practices.
Determining What Is Yours
Most property that you had before you were married is considered your ” separate property.” However, this is only true if the property is only in your name at the time of the divorce. All other property is divided “equitably.” In the ideal divorce, this would mean that both spouses would get one half of the property and assets, and pay for one half of the debt. In reality, things are never so cut-and-dried. The court will look to both parties’ financial situation, their contributions to the marriage, their conduct, alimony considerations and more.
Determining what is — and should be — yours is important. What did you bring into the marriage? How did you contribute to the marriage during its duration? Yet, dividing smaller things, such as furniture, can turn even the most peaceful divorce into a nightmare. Therefore, it is important to think big and not stress the small stuff.
What About Alimony / Spousal Support?
You should not depend on an alimony award — especially not a permanent award. Courts will usually base alimony on the need and ability of both parties, the length of the marriage and many other factors. In most cases, they prefer awarding alimony for an amount of time that will allow the spouse receiving alimony to become self-sufficient.
Health Benefits, Retirement Accounts and Taxes
Many people forget that asset division is not just about the money you have in the bank and the objects you own. There are also future assets and debts that must be taken into consideration. Each spouse has a right to a portion of the other’s 401(k)s and pension plans. Through a Qualified Domestic Relations Order (QDRO), you can split your spouse’s retirement accounts.
Many individuals can also pay to stay on their spouse’s health care plans after a divorce. This is especially important in divorces involving children.
Finally, there are many tax considerations involved in property division. How much is your property settlement worth after taxes? Are there ways to improve both parties’ tax benefits after the divorce?
Taking the Right Steps Now for a Better Tomorrow
Very few people come out of divorce in the same economic shape that they were in before the divorce. Things are going to change. However, there are steps you can take to ensure that your rights are protected during this transition. For more information, talk with a divorce lawyer in your area.