Financial Issues that Could Surprise You During Divorce
While it is true that most families who file for divorce expect to grapple with some financial obstacles, including deciding who will retain what property, child support, and whether one spouse will be required to pay alimony to the other, there are a few different financial issues that still take people by surprise. For instance, many fail to address pensions, Social Security benefits, and taxes during their divorce, which can end up delaying the proceedings indefinitely. To ensure that this doesn’t happen to you and that you are advised throughout your own divorce, please contact an experienced Fort Lauderdale divorce lawyer who can help protect your legal interests.
Many individuals receive pensions after years of employment with the same company. These funds, which are deducted from a person’s paycheck every month, can prove tricky in the context of divorce. This is largely due to the fact that pensions don’t actually have any value until retirement. For this reason, the spouse requesting a portion of the pension will almost always have to formally request a share of the account by sending a Qualified Domestic Relations Order (QDRO) to the plan’s administrators, which grants an individual the right to a portion of the plan.
Pensions are, however, usually considered marital property, at least when it comes to the amounts accumulated during a marriage. Benefits that accrue prior to or after the marriage, on the other hand, will be considered separate property, unless otherwise specified in an agreement between the parties. Once a court has determined how much of a pension was earned during the marriage, it will decide what would constitute an equitable division of that asset. This could take the form of dividing the payment in half, or awarding one spouse assets of comparable value in lieu of having to split the pension.
Social Security Benefits
Individuals who file for divorce after middle age often face different financial hurdles than younger parties. For instance, those who have been married for at least ten years prior to divorce, are over the age of 62 years old, have not remarried, and whose former spouse is eligible for Social Security benefits, could have a claim on a portion of those benefits (the portion based on the income earned during the marriage). For help determining whether you could qualify for a portion of a former spouse’s Social Security benefits or other retirement funds, please call our office today.
A person’s ability to file a joint tax return with a spouse ends the same year that a divorce is finalized. This is true regardless of whether the divorce was obtained at the beginning of the year or in December. Furthermore, certain tax breaks that a couple enjoyed in prior years may no longer be available to both parties, who will now be required to file as a head of household in order to enjoy those same tax benefits.
Speak with an Experienced Fort Lauderdale Divorce Lawyer
To learn more about the financial implications of filing for divorce, please call 954-945-7591 to set up a free case review with dedicated Florida divorce attorney Sandra Bonfiglio, P.A.