Money is one of most common things couples fight about during a marriage. It is no surprise that it is a major worry during almost every divorce.
Making mistakes is easy whether you controlled the finances or not. The divorce process is more of a marathon than a sprint. Following these tips will protect your financial future as you cope with divorce fatigue and want to get the process over.
Get all the financial documents
While this may sound simple, it can take diligence to dig up and organize all the relevant financial documents. Past tax returns are a start. If your spouse owns a professional firm or construction company, you need to review old financials as well as recent balance sheets.
Understanding what is in the financials could show that sales dropped off right after you filed for divorce. It is unlikely a coincidence and might affect your requests for child custody and spousal maintenance.
Seek an expert valuation
Much of your wealth is not in a liquid form. It is your home, business and cabin as well as retirement and investment accounts. The tax-assessed value of a property is often not the same as the actual fair market value. Whether you will sell a home or one spouse will keep it, you need an accurate valuation. Valuing a business can be even more challenging.
Pensions are also notoriously difficult to value and failure to account for them properly could mean a division of the assets that is not fair and reasonable.
Any part of the property settlement characterized alimony is taxable to the spouse who receives it; however, child support is not. A lump sum payment instead of monthly alimony could result in a large tax bill in one year.
Failing to understand the tax implications of the property division could leave you with an unexpected tax debt.
Review insurance policies
Get quotes on your own health and life insurance policies. Then figure these costs into any post-divorce budgets. If you have young children, you also need to ensure adequate life insurance remains post-divorce to protect them.
Because you do not deal with divorce issues every day, speak with a knowledgeable family law attorney to protect your finances moving forward.