Divorce is among the most traumatic events to occur in someone’s life. The emotional aspects associated with it are challenging to handle, and financial implications add more weight to the stress. The courts usually finalize the financial aspects of the divorce with the help of certified divorce financial experts such as the Certified Divorce Financial Analyst Indianapolis, IN. Some of the financial ideas and issues that the court considers and that you should discuss with your financial advisor and attorney include:
In all instances, you must identify the properties that each spouse owns and those owned jointly. A three personal balance sheet containing “theirs, hers, and his” will help at this stage. Include all your cars, financial accounts, household items, jewelry, and real estate among other essential assets. When preparing these statements, identify the source of the asset and how you came to own it. For example, indicate if it’s an inheritance, gift, or you bought it.
It is also essential to decide how defined-benefit plans, such as a pension, will get divided between you and your spouse. The plans are usually spelled out as a percentage of your retirement benefits at the time of separation.
When divorcing your spouse, the obligations do not part. In many cases, the spouse keeping the house will have to pay the debt or mortgage related to the property. However, this does not mean that the other spouse does not have a financial obligation for the joint debt. Even if the spouse keeping the property assumes the responsibility of taking care of the existing mortgage, both the spouses are still obligated to clear the debt. Divorce does not set you free from your debts.
Also, consider credit cards as it’s another problem area. Determine the balance on the cards and the spouse whose name is in the cards. Also, determine if the non-debtor spouse has charging privileges on the card and if there’s a need to have their charging rights frozen.
Be cautious when handling the tax issues during the divorce. Let the analyst walk you through all the divorce proceedings. These experts will determine who will receive tax exemptions or claim head of household status. They will also help you navigate the tax-deductible maintenance payments.
Apart from these, these professionals will help know the tax-deductible attorney fees and how to have deductible child support. While at taxes, provide copies of your joint tax returns for the past five years. Apart from this, have all the records needed to calculate the cost basis for all your assets.
Spousal and Child Support
Many people confuse child support and alimony. They are not the same; if you’re the spouse receiving the maintenance, you’ll get a tax on what you receive. If you are paying the alimony, you will deduct these sums from your federal income tax. Child support is non-taxable, and unlike alimony, it is negotiable.
Keep an open mind when handling the financial aspects of the divorce. Work with a certified divorce financial analyst and let them take care of this crucial aspect while you focus on healing and moving on from the divorce.