Plan And Protect Your Future Prior To Divorce
Divorce is undoubtedly an emotional situation. You might eventually come to terms with the loss of a relationship. However, bad financial decisions could haunt you for all time. Take the following under consideration for your sake and the sake of your children too.
Your Net Worth
It's easy to be intimidated by the above term but it's just another way of saying how much you owe and how much you own. Unfortunately, divorce does not generally improve net worth equations for many people. While it can be difficult to see where you are financially, it's vital information that should figure into every divorce decision you make. For instance, those with a lot of property and debt should consider liquidating property to pay off some debt.
Plan for Retirement
No matter what your age, everyone needs to know about using a qualified domestic relations order (QDRO or "Quadro"). This order is separate from the divorce proceedings but connected because a QDRO is not possible without a divorce. The order allows parties to take a dispersal of their spouse's retirement plan and use it for their retirement funding. Retirement plans, remember, are marital property even if you did not contribute to your spouse's plan. How much you get depends on the divorce agreement. The best thing about a QDRO is that you won't be charged penalties for early withdrawals.
Understand Debt and Property Divisions
Marital property and debt divisions are determined by how your state addresses things. Some states – though, only a few, use community property laws. That means each party in the divorce is responsible for 50% of the debt and are eligible to be granted 50% of marital assets. The other states use equitable distribution to divide debts and assets. That means the judge makes decisions based on who bought the item, who took out the debt, etc. Take these steps:
- Make a list of all property and debt. List things owned and owed by you, your spouse, and jointly.
- Speak with a divorce lawyer and find out what items are considered marital property and marital debts.
- Carefully consider marital property based not only on its value now but what it might be in the future. For instance, a home can be a large asset, or it could be a financial drain.
- Anything you and your spouse can agree on should be added to the settlement agreement.
- For anything not agreed upon, consider using a mediator to resolves issues. That is a lot less expensive than having the judge decide for you.
Discuss your case with a family lawyer in your area.