Divorce can be a difficult process for people. Most want to be financially secure after a divorce, especially when they only have themselves to count on. Taking a few financial steps in preparing for a Divorce can make the process much easier.
Keeping track of financial information is very important. Making copies of past tax returns can be helpful. Requesting a joint credit report from all three credit reporting agencies will give insight on shared debt as well as individual debt.
Tax implications can greatly affect the worth of certain assets. Dividing everything evenly can be challenging, because not everything is created equal. For example, before a person gets rid of a 401k that appears to be the same worth as their house on paper, they should consider tax implications as well as what the cost to sell would be. Also, paying off as much debt as possible before the divorce is final is usually best. Even if the divorce decree rules that one spouse must pay the debt, creditors may still come after other spouse if the debt was held jointly.
The spouse's name should be taken off of any insurance policies that are in both names. Insurance policies should also be reevaluated to determine that coverage will be enough as an individual. Personal insurance policies as well should be updated to take the spouse's name off as a beneficiary. An insurance policy will override a will as to a beneficiary.
Divorce is a delicate situation that must be handled with care. When a person is going through a divorce and is fearful of the unknowns of their financial future, they may benefit from contacting an attorney with family law experience.
Source: The Courier of Montgomery County , " Financial items to consider during a divorce", June 21, 2014
No Comments
Leave a comment