Virginia residents contemplating divorce may know that it is an emotionally difficult time. Many decisions need to be made, and some will affect their financial future. Maintaining focus on financial matters is important, and there are things that may be done to make the decisions easier.
The first thing is to get a handle on what the marital assets are. Knowing this makes it more likely that asset division will be fair. One of the best ways to do this is to make a copy of previous tax returns. Reviewing credit reports will allow a spouse to see how much debt has been accrued jointly and separately. It is advisable to pay off debt before the divorce becomes final, and it is best to not take on additional debt. Even after divorce, if a spouse fails to pay debt they were ordered to pay, creditors may still ask their former spouse to pay it instead if both spouses signed a loan agreement.
Taxes play a considerable role when items are sold in a divorce. Selling a home or divesting a retirement fund will be treated differently. It is best to ask for tax advice from an accountant or a financial consultant before dividing assets. Setting up new bank accounts and obtaining credit cards as soon as possible is important. While it may not be imminent, there will be a time when Social Security benefits are available. It is a good idea to get an earning and benefits statement for both spouses ahead of time so it will not be a future problem. Updating insurance coverage is also a necessary move.
At times, divorce may be complex. An attorney might provide advice and guidance on how to proceed to prepare for the future and structure a workable resolution to disputes.
Source: The Courier of Montgomery County , “Financial items to consider during a divorce”, Byron W. Ellis, June 21, 2014