Important Financial Factors to Address During Divorce

 Posted on June 05, 2018 in High Asset Divorce

Although many couples who file for divorce anticipate conflicts regarding custody or possession of a home, financial problems still catch a significant number of people off guard. Going into divorce proceedings with an understanding of the financial impact that dissolving a marriage will have is crucial, so if you are considering filing for divorce, it is important to consult with an experienced high asset divorce attorney who can walk you through your next steps.

Protecting Your Credit

There are a number of steps that divorcing couples can take to help mitigate certain types of financial problems that they might otherwise face down the road. For instance, protecting one’s credit is an important measure that is often overlooked by divorcing couples. This includes canceling any joint credit cards held in a soon to be ex-spouse’s name, which helps ensure that one party’s credit does not remain tied to the other’s spending habits. This is also a good way to start building a good credit score under your own name.

Updating Your Beneficiaries

Another step that many divorcing couples forget to take is updating their beneficiaries on important policies, including pensions, trusts, retirement accounts, annuities, and insurance policies. Parties who fail to make these changes could end up leaving a significant portion of their assets to an ex-spouse instead of a new partner or a child in the event of their death.

Planning Your Estate

Divorcing spouses are also encouraged to begin planning their estate if they have not already done so. Although this may come as a surprise to many, it is a good idea to speak with an attorney about changing a will or drafting new estate planning documents entirely, as failing to do so could result in a person’s inheritance going to an ex-spouse.

Dividing Retirement Plans

Dividing retirement accounts can be a complicated process, especially because it can have unintended tax consequences and come with hefty administrative costs. There are also specific steps that must be taken in certain cases to ensure that a plan’s administrators pay benefits according to a settlement agreement, including executing Qualified Domestic Relations Orders (QDROs) for the division of non-IRA pension plans and 401(k) accounts.

Selling/Refinancing the Family Home

Deciding who will retain possession of the family home can be complicated for many divorcing couples, especially when both parties wish to keep the residence. In an effort to avoid these types of problems, many couples are encouraged to sell marital property, including real estate, and then split the proceeds. Alternatively, if one party wants to stay in the home, it’s important to refinance the mortgage under his or her name, which ensures that the relocating spouse doesn’t remain on the hook for any future payments.

Contact a High Asset Divorce Attorney Serving Round Rock

If you need legal advice on matters related to your finances during and after divorce, please contact Powers and Kerr, PLLC today to find out how we can help. Our dedicated Round Rock high asset divorce lawyers are here to help you immediately.

Sources:

https://www.huffingtonpost.com/gobankingrates/40-secrets-only-divorce-a_b_8602766.html

https://www.forbes.com/sites/jefflanders/2012/05/09/the-five-key-points-divorcing-women-need-to-know-about-financial-affidavits/