Virginia couples who get a divorce should have a financial plan to ensure that it does not adversely impact their financial future. Each party’s financial goals after a divorce may be drastically different from those they had during their marriage. When making financial decisions, emotions should be set aside and objectivity should be the focus. There are multiple financial planning strategies that can be used to make the best decisions after a marriage comes to an end.
Before signing a divorce settlement, it is important for individuals to evaluate their financial situation. They should review their assets, income and tax circumstances to have a clear of what they have been spending during the marriage and what they will have to spend when the divorce is final.
When devising a post-divorce budget, it is wise to account for alimony, whether it is being paid or received. In this regard, people should know that under the tax law that was signed last December, alimony is no longer deductible by the person paying it nor it is taxable income to the recipient.
Another step for financial planning for after a divorce is deciding whether to downsize. The family home is generally a significant asset. If the home accounts for a substantial percentage of a person’s wealth, it may be prudent to diversity assets. One should also keep in mind that maintaining the home may be difficult on just one income, making relocating to a less costly residence or finding a rental better options financially.
A family law attorney may assist clients with obtaining their desired divorce settlement terms. Negotiation may be used to resolve property division disputes, which could include retirement accounts and other investments.
