Money Management During the Settlement Process
With all of the necessary tasks to accomplish when getting a divorce, managing one’s money — and taking care of financial details expressly related to a settlement — may sometimes end up on the backburner. Unfortunately, the consequences of this approach can add to the difficulties involved in divorce proceedings.
To help ensure your money is well managed before and during the dissolution of a marriage, you’ll want to follow these commonly overlooked measures:
- Assess spending needs. Ensuring that you have adequate cash flow should be top of mind. This may require liquidating assets such as stocks, bonds or mutual funds to secure the necessary funds.
- Look at joint liabilities. Addressing any debt is an important part of the process and lenders don’t always fully honor property settlements. You’ll want to transfer debt to the person responsible for it or pay it off in full.
- Consider tax implications. If you owe taxes from previous years, you’ll need to pay those off as well. You should also consider how taxes might affect assets like retirement accounts, which may likewise change their economic value. You should also assess past returns for so-called “tax assets” (such as capital loss carry-forwards) that will reduce taxes in future years so that they are fairly allocated.
- Divide retirement accounts. For many people retirement accounts represent the bulk of their assets. Special care needs to be taken to ensure that transfers are recognized as tax-free under applicable law.
Divorcing couples should also be aware that some assets are of less value financially, but are still meaningful, such as digital media like photos and videos. Working out access for both parties should also be woven into the process of division.
Contact the skilled Long Island divorce attorneys at Bryan L. Salamone & Associates for the assistance you need when facing these issues.