Think about all of the items you accumulate over time. Now, imagine having to sort through and split all of those items. Understanding the following financial considerations during a divorce will provide a successful transition into your future. Here are some factors to consider:
- Primary Income Earner: When one spouse makes significantly less than the other or is a non-earner, the court will arrange spousal maintenance payments, also known as alimony. If children are in the picture, the spouse not given primary custody may need to make child support payments regularly. If one parent provides health insurance for the child(ren), any premiums or deductibles from medical visits may also be considered.
- Dividing Primary Residence:
If you wish to remain in your home, you may need to consider giving your spouse a larger distribution of another asset for an even share. Keep a record of any improvements or repairs made to the current property by jointly owned assets and determine how previously agreed upon plans for changes/fixes to the residence will be paid. The spouse who does not get to retain the property can calculate the projected realtor costs for the eventual sale of the home and subtract half from the equity.
- Splitting Retirement Plans:
As a general rule of thumb, retirement plans are split equally unless any funds were acquired before the union. Factoring in this particular split is important as anyone over 50 may be relying on this number for when they can retire, and sharing that asset by half may significantly impact when retirement is possible. In the event of a QDRO (Qualified Domestic Relations Order), part of the assets in an IRA or workplace plan for an ex-spouse’s retirement account will be arranged.
- Understanding Social Security Benefits:
When you reach retirement age, you must have been divorced for two years and stayed divorced to be eligible for spousal Social Security benefits based on your ex-spouse’s earnings. However, you must have also been married for at least ten years prior to divorcing. Plus, the amount you are eligible to receive must be larger than the benefit you would receive on your own accord.
- Knowing Tax Implications: Filing status changes the year the divorce is final. You’ll need to decide on filing as single or “head of household” if you qualify. Choosing how mortgage and property taxes will be handled is also important in the year of the divorce – whether you are splitting it or if one spouse is claiming the deduction and compensating the other. Also, note if any other assets or liquidations are liable to be taxed. For child tax credits, the spouse with custody usually retains the right to claim, but the noncustodial parent can have the right transferred as well.
If you have a desire to legally terminate your marriage or seek advice regarding your rights, we encourage you to reach out to our Akron divorce attorneys at Hoover Kacyon, LLC. They are ready to assist you in scheduling an appointment to discuss the possibility of divorce and what it will entail. If you have been served with divorce papers by your spouse, acting promptly and securing legal representation is crucial. You must meet specific court-mandated deadlines, and
by contacting us at
330-922-4491 or
reaching out to us online, we can swiftly arrange an initial consultation for you.
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