Financial Planning for a Divorce – Taking the First Steps

 Posted on December 20,2017 in Divorce

Divorce can be a complex and arduous process since there are numerous potential pitfalls and challenges – and money is often the greatest concern. However, many parties overlook important financial planning details when they first file for divorce. The result of this oversight can range in severity from a minor loss of some funds to complete financial devastation. Learn how to mitigate against the potential money issues in your Illinois divorce with effective financial planning, and discover how an experienced divorce lawyer is able to help.

Start Your Post-Divorce Budget Now

It may seem a bit premature to be planning your post-divorce budget at the time the case is filed, but having a clear idea of how much money you may bring in (and what you expect to spend) as you work through the divorce process can save you a great deal of time, money, and stress in the future. Consider also how you plan to spend any post-divorce settlement. Will you sell the marital house and move into a smaller place to give yourself more financial breathing room, month to month? Who will pay for the kids’ college expenses? Also, do not forget to save for personal goals, such as vacations or a new vehicle.

Your Spouse’s Social Security Benefits (Is Remarriage an Option?)

If you and your spouse have been married for at least 10 years, you may be eligible to receive benefits from their social security account, once you reach retirement age. However, that benefit disappears if you remarry. Before you say “I do” again, stop to consider if you may be at risk for a financial loss during retirement. Compare social security benefits available from your ex-spouse’s account to those of your potential new spouse. If your ex’s benefits would be higher, remarriage may not be in your best financial interests.

Counting Alimony as Income

If you believe that you may be entitled to maintenance (also known as alimony) in your divorce, it is important that you understand that currently it is considered taxable income by the Internal Revenue System (IRS) (however, this will change under the new federal tax law). That fact will affect how you fill out your tax return (on which you are now required to report the alimony, and your annual refund amount or tax owed amount. Alternatively, if you believe that you may be required to pay alimony, know that currently you may be permitted to write it off as a tax deduction (but this, too, will change under the new federal tax law).

Contact Our Hillside, IL Divorce Lawyer

Planning for the financial aspects of your divorce is more than just savvy – it is exactly the type of preparedness that can protect your financial future, long after the divorce has been finalized. However, the complexity of the law leaves individuals at risk for costly mistakes. As a result, divorcing parties are strongly encouraged to have a skilled divorce attorney on their side, right from the start. Contact our Hillside, IL divorce lawyer for a no-obligation consultation to get started with your case today. Call 708-449-7400.

Source:

https://www.cnbc.com/2017/10/02/financial-planning-for-divorce--its-not-just-for-women.html