Avoid Making These Common Financial Missteps During Your Divorce
Dissolving a marriage is never easy, especially when it comes to splitting up the assets that a couple worked so hard to accumulate. Protecting these assets is more important than ever when ending a marriage, as doing so is critical to ensuring that both parties receive a fair share of the marital property. Unfortunately, with all of the emotional turmoil that goes along with dissolving a marriage, many couples make financial missteps that have significant repercussions on their financial situations post-divorce. To ensure that your family does not suffer from one of these mistakes, please contact our dedicated property division legal team today.
Making Expensive Purchases
Divorce can be expensive and requires careful planning and budgeting, at least until the divorce is finalized, to ensure that both parties receive a fair property settlement. For this reason, one of the biggest finance-related mistakes that a divorcing couple can make is to spend significant amounts of money on expensive or unnecessary purchases. While shopping can be a good way to relieve stress, making big purchases when going through a divorce can result in allegations of wasting marital assets. This in turn, could lead a judge to give one spouse a larger portion of the marital assets, so it is wise for divorcing couples to pay careful attention to their finances until their divorce is finalized.
Failing to Take Taxes Into Account
In prior years, those who paid alimony could deduct those payments come tax season. Recent amendments to the tax code, however, changed these rules and former spouses who pay alimony can no longer deduct those payments, while alimony recipients are also not permitted to count the payments as taxable income. Failing to take these changes into consideration can have serious repercussions for a couple’s financial situation following divorce. Similarly, choosing to sell stocks or take funds out of a retirement account while waiting to finalize a divorce could result in the withdrawal being subject to a penalty of as much as 25 percent, in addition to being considered taxable income.
Failing to Make a Financial Plan
Failing to make a plan that reflects the parties’ new financial situations following the dissolution of their marriage is another common misstep in divorce. While finances may not be the first thing on a couple’s mind when filing for divorce, it is important to remain focused on the property division process. This includes creating a financial plan that accounts for the parties’ incomes, household expenses, childcare costs, and spousal maintenance. Properly identifying and appraising all marital property is also important at this juncture, as is considering the tax repercussions of any property settlement entered into by the parties.
Changing Employment to Avoid Spousal Support
Changing jobs to avoid paying spousal support is another common mistake that divorcing spouses make. Ultimately, taking this route will not usually save the payor money, as any spousal maintenance agreement entered into by the parties will usually be modified following the payor’s reemployment. Furthermore, judges do not look kindly upon these kinds of attempts, so it’s usually in your best interest to avoid quitting or changing your job during a divorce.
Call Today for a Free Case Review
To discuss your own divorce strategy with an experienced Fort Lauderdale property division attorney, please contact Sandra Bonfiglio, P.A. at 954-945-7591 today.