What you need to do
Key steps to consider, what to watch out for, and ways advisors can help as you plan ahead for this major change.Find Your Adviser
Plan for Expenses
Divorce attorney, mediation, additional residences, and consultation fees can all affect your short- and long-term finances.
Manage Changing Finances
Plan ahead for the financial and tax impacts of potentially maintaining two households, health insurance coverage changes, and more.
Take Full Inventory
Don’t overlook any joint or separate assets and debts and make sure you fully understand the financial consequences of a settlement, such as hidden taxes, depreciating assets, and/or a budget that doesn’t withstand inflation.
Understand Updated Tax Laws
As of 2019, certain types of alimony are no longer tax-deductible, including payments through retirement accounts.
- Holding on to assets that will incur costs
- Not protected from spouse’s debts
- Lower alimony or child support payments
Certified Public Accountant (CPA)
Make sure you’re withholding enough based on your new tax filing status, reduce your taxable income as much as possible, decide who will file as head of household, and maximize all potential deductions.
Short- and Long-term Plan
Property divisions may also trigger unexpected taxes, and an experienced CPA can help flag potential issues for future tax year.
Trust & Estate Attorney
If you anticipate that you and your soon-to-be ex-spouse will not agree on how to divide marital assets, alimony and child support payments, and/or child custody, an attorney can advocate and negotiate on your behalf.
Lawyers provide advice and often tell their clients what to do, whereas mediators serve as an unbiased third party that does not make decisions.
Key Tasks to Complete
Ensure that you properly account for commonly overlooked types of marital property and that your QDRO (Qualified Domestic Relations Order) is completed correctly.
Protecting Your Personal Credit
Reconcile joint accounts and cards to help preserve a strong credit score for yourself post-separation.