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Financial Considerations During A Divorce

Ending a marriage can impact not only your emotional status, but your financial status as well. Couples who have combined their finances for the duration of the marriage may find it difficult to face the financial challenges that come from separating these finances during a divorce.

Be aware of the following financial considerations that you will need to make during your divorce so that you can be prepared to tackle these issues effectively.

Division of Assets

One of the primary financial concerns that couples have when going through a divorce is the division of marital assets. Only a handful of states consider all marital property as the joint property of both spouses and require the equal division of assets during a divorce.

Most states have provisions for partners to retain ownership of assets they brought into the marriage. Anything that was purchased after the marriage (home, vehicles, etc.) must be divided by the spouses. Don't lose out on financial equity by failing to fight for your rights during the division of assets.

Division of Debt

Another financial issue that can impact you after a divorce is the division of marital debts. Couples often accrue debt throughout the course of their marriage. While the repayment of these debts might be manageable with the dual income of a marriage, paying for marital debts after divorce can be a burden.

Be sure that you carefully review both you and your spouse's repayment abilities with your attorney so that you can work to divide marital debt in a fair and equitable way.

Filing of Taxes

Divorced couples are often surprised to find that ending a marriage can have tax implications. It's important that you recognize how your filing status might change as a result of your divorce so that you can work out the details with your spouse during divorce negotiations.

Take the time to discuss which spouse will claim the children as dependents when filing taxes. Determine who will file as the head of household. Work with your divorce attorney to ensure that child support payments are deductible. Addressing tax issues during a divorce can help reduce the negative impact a failed marriage can have on your future finances.

Planning ahead for your financial stability is essential during a divorce. Protect your rights during the division of assets and debts, and ensure that tax issues don't become too costly following your divorce by negotiating the details of these financial factors carefully.