Getting Divorced
Where do you start?
A divorce can be a difficult time. Yet, with some preparation, you can plan how assets and debts will be divided and take charge of your financial well-being.
Where do you start?
A divorce can be a difficult time. Yet, with some preparation, you can plan how assets and debts will be divided and take charge of your financial well-being.
Today in the U.S., what percent of marriages end in divorce?
Choose an answer from the following buttonsCorrect
That′s correct 44% of marriages end in divorce.
Too much
Fortunately, only 44% of marriages end in divorce.
Do some financial homework first:
Each prenuptial agreement is unique. Generally, prenups:
Without a prenup, or for issues not covered by the agreement, you'll work with your legal and tax advisors to reach a settlement, including alimony, division of property, and child support.
Alimony, or spousal support, is a stream of payments from one spouse to the other. Your state may have laws that affect your alimony and how it's structured. Alimony can be:
You won't pay income tax on alimony you receive and if you pay alimony, you won't be able to take a tax deduction.
Your property settlement is the division of marital or community property assets. State laws may vary, but these assets:
Work closely with your attorney to determine the assets that fall into each category.
Some assets become more complex in a divorce. For instance:
But, if the nonemployee spouse will not be eligible to receive them; other assets may need to be shifted to balance the employee owned benefits.
The amount and length of time for child support payments will be specific to your divorce agreement, as finalized by the court. Often, it will last until the child reaches age 18, and may or may not require that college funding be available as well. Child support is not taxable income if you receive it, nor is it deductible if you pay it.
Think about which assets you’ll need to negotiate as part of the property settlement.
Once you look at your budget, you'll know if you can expect to have additional funds to invest (a cash flow surplus) or if you'll have a shortfall and need to reduce spending or withdraw from investments periodically. In either case, this is an opportunity to speak with us about asset allocation to help meet your new needs.
Check with your employer's human resources department to determine if you need to update any of your benefits. Divorce is considered a "life event" so you can make changes during the year instead of waiting until the annual enrollment period. Here are some other considerations:
These are just some of the financial factors that you should consider. Talk with us as well as your legal and tax advisors as early as possible. This will help you make better decisions and improve your long-term financial security as you go through a divorce.
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