The financial aspects of a divorce are often some of the most challenging to deal with. You can’t rely on your ex’s income and you shouldn’t have to feel stress about paying the bills more than what is necessary. One way that you can do this is through the property division process, which is when you and your ex will divide the assets and debts that accumulated during the marriage.
When you first find out about the divorce, whether you file the petition or not, you need to sit down and get an idea of what your finances look like now. Creating a budget is one way that you can do this. Ideally, you will get this handled prior to starting the property division process because it gives you an idea of what you can afford to try to keep and what you need to let go.
Know the assets and debts
You need to know what assets and debts need to be split up. As you go through the assets, make notes about which ones require upkeep costs. If you are interested in hanging on to these, you need to determine if they are going to strain your finances more than what is acceptable. If anything will drain more of your finances than what you can comfortably handle, it is best to leave those assets alone.
Remember that you are going to be responsible for some of the debts that were part of the marriage, as well as all of the debts that you brought into the marriage. The only exception is if you have a prenuptial agreement that outlines them. These will also weigh on your budget.
Value of assets versus worth today
When you are dividing assets, you need to determine the actual value of each one. This might not be what they are worth today. You need to think about the tax consequences of keeping various assets because this can alter their value.
Retirement plans are something that you have to be especially careful about. When you are determining what happens to these, you must have the plan outlined in a qualified domestic relations order, which will be issued by the court.
In all aspects of the divorce, you need to consider how your decisions today will impact your future. There are many things this can affect, including your financial stability. Each decision that is made must be put in the divorce settlement paperwork. Ensure that the QDRO is set up as intended and approved by the plan administrator.