How to Prepare for the 3 Most Common Financial Issues in Divorce

When your marriage comes to an end, there’s a lot more to it than going your separate ways. If you have been married for 10 years or more and have children, intermingled or jointly owned property, savings, or share other significant assets, you are bound to experience disagreement or conflict at some point during divorce.

One of the best things you can do heading into divorce is to identify what belongs to you, what belongs to your spouse, and what belongs to you both. By agreeing upon separate and marital property as much (and as early) as possible, you may be able to steer clear of conflict when it comes to possessions and finances.

Dividing Up Shared Debts

Whatever debts you incurred before marriage will likely be allocated entirely to you after divorce, even if you paid a portion of the debt together. However, shared debts are not quite so easily divided, as they can vary in size, interest rates, and attachment to various other assets and jointly-owned collateral.

When it comes to splitting up shared debts, one of the best ways to avoid conflict is to pay off the debt as soon as possible. You can do this by agreeing to sell various assets in order to make up the remaining amount of the debt owed. By eliminating as much of your shared debts as possible during divorce, you can avoid heavy financial strain following divorce and set yourself up for a fresh start after it’s over.

If you come upon a debt that cannot be split up or that you are not able to pay off together, one of the best ways to avoid conflict and ensure fair distribution is to pay off debts together in equal amounts. If this is not ideal, you can also barter with assets and debts until you and your spouse reach an agreement you are both satisfied with.

Settling Tax Issues During Divorce

When it comes to taxes and your legal status as parents, homeowners, etc., divorce can muddy the waters and leave you vulnerable to unintentionally making expensive mistakes. Some of the key issues you and your spouse must address include:

  • Making sure your child support is tax-deductible
  • Tax exemption for children and dependents
  • Head of Household status
  • Responsibility for attorney and court fees after/during divorce

It is important to work these things out as much as possible while you are getting divorced, rather than waiting until afterward. If you are considering divorce or have begun the process but aren’t sure what it means for your status, deductions, and taxes, consult with an experienced Fairfax divorce lawyer right away.

Divvying Up Retirement Savings

If you have been married for a significant amount of time, you and your spouse have likely accumulated some retirement savings in the form of a joint savings account, Roth IRA, 401(k), or other retirement savings plan. Simply withdrawing money from these account could have negative consequences for both of you and require you to pay at least 10% in tax penalties to the IRS. Splitting up retirement funds is never ideal, as it leaves both parties with significantly less savings than before, but attempting to divide it without the help of a divorce lawyer could have even more painful, longer-lasting consequences.

Speak with a Seasoned Divorce Attorney in Fairfax, VA Today by Calling (314) 441-7793 Today

Don’t go into your divorce alone. Aside from being emotionally traumatic, it tends to get dicey when it comes to money and property. Don’t be caught off guard or taken advantage of when dividing up important assets such as savings, shared homes, etc. If you are getting a divorce in Fairfax or the surrounding areas, call the Kallen Law Firm, LLC today. We are prepared to help you minimize conflict during your divorce while ensuring you receive your fair share of property, assets, and savings.

Schedule your free consultationwith us today or get in touch with a member of our team by calling (314) 441-7793.