Filing for divorce impacts your life in virtually every way you can imagine. You are splitting up your assets, may be moving, must share custody and take other steps that disrupt your “normal.”
With so much going on, it’s easy to overlook some important financial aspects of a divorce. However, planning now will help you protect your financial situation and plan for the future.
Long-term financial considerations
Understanding your long-term living costs is essential to ensure that you receive a fair amount of assets and support payments. This is even more important if you have sole custody of your children.
When you start negotiating your divorce settlement, you can’t just think about the next two to three years. You need to consider several decades in the future to help ensure you protect your long-term financial health.
Look at your assets carefully
Dividing your property is a huge part of a divorce. However, what you may not realize is that all assets aren’t the same or equal. For example, getting a savings account with $200,000 is worth more than your joint retirement account that will be taxed. Be sure you think about the post-tax value of assets and the potential risks they present during property division.
Just like anything else in life, a divorce settlement will have certain tax implications. Knowing how different income streams and assets will be taxed is a must to ensure fair and equitable property division.
Protecting your financial health in a divorce
Filing for divorce is stressful. However, the tips above are important to protect your financial health. Learning about your legal options and rights is also important to ensure you don’t experience financial hardship down the road.