Are You Making These 3 Financial Mistakes In Your Divorce?
A divorce for an older person is often a different experience than someone who is younger than 50. Late-life divorces sometimes do not have child custody and support to consider and retirement planning plays a bigger role in dividing marital assets. If you are 50 years of age and older, here are some missteps to avoid in your divorce:
Keeping the Family Home
Even if you have an emotional attachment to the family home, hanging onto it could cause serious financial problems later. Instead of you and your spouse being responsible for the taxes and upkeep of the home, all the duties will fall to you. Unless you have the funds available to meet each financial challenge that comes with homeownership, you could be setting yourself up for failure.
Selling your home is likely the best move. However, if you want to keep it, you need to plan. Make sure you have enough saved to cover unexpected expenses. You also need to keep in mind that property taxes fluctuate. You might have to pay more each year.
Failing to Consider Taxes
The ending of your marriage is mainly a financial decision that could serious tax implications. Most actions that you and your spouse take will result in some changes to your taxes. For instance, you might have to pay a fine for withdrawing from your retirement account early if you had to as part of the settlement.
If you and your spouse fail to take into consideration how each action can impact your taxes, both of you could be faced with a surprise when it is time to file taxes. For each decision that you make, you and your divorce lawyer should review the possible tax implications and adjust your settlement offer, if necessary.
Once the divorce is finalized by the family court, it is difficult to get the order amended. Therefore, you need to ensure that every debt that was acquired during your marriage is considered before the divorce is final. Even if the debts are not in your name, they need to be considered.
As you and your spouse negotiate for assets, you also need to negotiate for debts. The responsible party for the debt should be included in your settlement. This is important because if a creditor attempts to take legal action against you for a debt that is your spouse's, you can provide a copy of the order stating it.
Your divorce attorney can help with avoiding other missteps in your divorce.