divorce360.com provides help, advice and community for people
contemplating, going through or recovering from divorce and the issues around it,
including separation, divorce laws, spousal support and emotional issues.

finance  :: general
Print
Email
...after 10, 20, 30 years of marriage, we have accumulated some assets, so we need to plan for divorce equally well.

Financial Tips for Women


Financial Tips for Women


Gather Documents and Know Assets to Keep from Losing Money in Divorce


By KAY BELL


TIP 3: Create a budget.
Go into the divorce with a sound post-marriage budget in mind. With­out one, you won’t have any way to gauge whether a settlement proposal will meet your new needs. Many soon-to-be ex-wives underestimate just how much it costs to live. “Divorce does not equal half the ex­penses,” said Johnson. “Sometimes there are hard decisions that have to be made,” said Fox. “You might want to stay in that big house where you’ve been raising your kids for the last 15 years, but realistically, can you afford to keep it?” That’s where advice from an expert can help. A divorce financial planner or analyst can run the numbers to help you decide, in this case, whether selling the property and using the proceeds to buy a smaller house would also provide you some money in reserve.

TIP 3: Create a budget.
Go into the divorce with a sound post-marriage budget in mind. With­out one, you won’t have any way to gauge whether a settlement proposal will meet your new needs. Many soon-to-be ex-wives underestimate just how much it costs to live. “Divorce does not equal half the ex­penses,” said Johnson. “Sometimes there are hard decisions that have to be made,” said Fox. “You might want to stay in that big house where you’ve been raising your kids for the last 15 years, but realistically, can you afford to keep it?” That’s where advice from an expert can help. A divorce financial analyst can run the numbers to help you decide, in this case, whether selling the property and using the proceeds to buy a smaller house would also provide you some money in reserve.


TIP 4: Know tax implications.
When considering an asset as part of a settlement, don’t just look at its dollar value. An asset’s tax consequences could make a big difference to whether you want it. Fox cites a couple whose assets include a retirement account and a regular investment account, each worth $100,000. She takes the retirement fund; he keeps the other account. But when she starts taking retirement distributions, she is likely to face a large tax bill on the tax-deferred money. He, however, is in much better financial shape because the regular account has been paying taxes over the years. Also consider the cost basis of property. It could make a huge difference when an asset is sold. Our couple also has two stocks, worth $30,000 each. One has a basis of $5,000, meaning $25,000 would be taxable upon liquidation. The other, however, might have a larger basis, meaning a smaller gain or possibly a loss that can be written off. “Divide the asset itself,” said Fox. “Don’t just say you take this stock, and I’ll take that one. Divide however many shares of each stock you have so that you both keep the same cost basis within the asset.” And don’t forget your largest asset: your house. If you sell it as a couple, you don’t have to pay taxes on up to $500,000 in profit. But a single seller only gets half that exclusion amount. Depending on the real estate appreciation your area, a single seller might exceed that tax-free amount and end up with an unexpected tax bill.

TIP 5: Keep up with details.
The devil is definitely in the financial details when it comes to divorce. “Before the divorce is final, make sure that you get life insurance to guarantee any child support or alimony and make sure the recipient of that payment is the owner of that policy,” said Fox. “If a husband is supposed to be supporting the family and something happens and there’s no life insurance to replace that, what already was a hardship is only going to get that much harder.” And don’t forget to redo your will and update your beneficiaries. “You wouldn’t believe how many times, years later, an ex-spouse is still beneficiary of an IRA or a 401(k). It’s just something that slips through.”


TO READ MORE

Click here to read expert advice for women on knowing marital assets.

Click here to read expert advice about the 15 financial mistakes in divorce.


Sources: Institute for Divorce Financial Analysts www.institutedfa.com; Association of Divorce Financial Planners www.divorceandfinance.com.
 




Page: First 1 2


divorce New this week::

Transition Institute: Telling Your Spouse You want to Split - Mental Health: The Dos, Don'ts of Telling Your Spouse You Want a Divorce

 

Your Kid Wants To Live With Ex - Tips On How To Cope If Your Child Wants To Change Homes

 

Living with a Habitual Liar? - Relationships: Four Ways You Can Tell if Your Spouse is Telling You a Whopper

 

divorce Community::
popular blogs
Day by Day and step by step
So guess what? The sun came up again oh yea - NOT. I put one foot in front of...read more 

Im in adore with these footwear
Im in adore with these footwear Nike. Theyre pretty old school and very cool,...read more 

get/give answers
Regretting my divorce....help?
Hi, I was married 22 years and have been divorced for 3 weeks.  Three months...Read Answers/share yours 

Obsessive Lavalife and craigslist phone calling
There is something that I do not understand about my ex. He was a narcissist...Read Answers/share yours 

expert Q&As
Faith Therapy : Does a Separation Work?
My Husband and I Are Having Trouble. Is It a Good Idea for Us to Separate?...read more 

Stress Relief: Tips to Help after Separation
Mental Health: Overwhelmed by Changes in Household Routine. What Should I do?...read more 

About Law: Do Divorce Kits Work?
Legal: What You Should Consider When You Think About Divorcing Using a Kit...read more 


expand information center
divorce360.com's ecards
ADVERTISING PARTNERS

Find divorce professionals in your area

Find lawyers
Find financial professionals
Find coaches
divorce focused content ::
divorce most popular ::
1. Are You Reading Your Spouses Text Messages?
Stop! It May Be Illegal & May Hurt Your Case

2. Eager To Check Those Texts?
Think your Spouse is Cheating? Professionals Can Check Text Messages

3. 8 Things No One Ever Tells You about Divorce
Number Three May Surprise You

4. They Won't Leave? Now What?
You Want a Divorce, but Your Spouse Won’t Leave. Here’s How to Get 'em out

5. When Is a Marriage Worth Saving?
10 Things to Think About When Considering Whether to Stick with a Relationship