You already realize that your finances will play a major role in the divorce process. Dividing your assets and accounts can be one of the most contentious parts of a divorce. But what financial factors go into the divorce process? What should you know about your finances prior to or during your divorce to fully understand what’s going to happen?
Financial Information To Consider
There are countless factors in divorce and many financial variables you’ll need to think about during this process. A few of the most important financial issues you’ll want to consider include:
- Retirement accounts: 401k, IRA and pension plans are often your most valuable asset and should be carefully considered. Will your 401k be split evenly? How much are you owed? What are the tax implications?
- Debt: you might not realize that debt is often also split during a divorce, including student loans, mortgages and credit card debt. Do you know how much debt you and your spouse owe? Who was primarily responsible for debt in student loans or credit cards?
- Real estate: this is a particularly complex aspect of divorce. You can’t split a home or a business property down the middle, so it is often a difficult asset to settle on. Who will pay the expenses? How will the profits be divided if you choose to sell?
- Taxes: understanding tax implications is an important part of negotiating a settlement due to changing filing status, especially when children are involved. Will you pay a higher tax rate now? Who will claim your dependents?
Understanding these financial issues and getting more information about them can help you navigate your divorce more successfully, without unpleasant surprises. As always, consulting a professional such as a divorce attorney or accountant can help you get the information you need about these financial considerations so you can move forward successfully after your divorce.