Divorce is an extremely difficult experience. Educating yourself about
the economic implications of ending a marriage could save you thousands
of dollars. Realization that there is financial survival after divorce
can be a great comfort in this process.
For a billionaire like Donald Trump, financial survival is highly probable.
Prenuptial agreements can be a great idea, but for the middle class, these
options are not always considered. It is likely that the process will
leave the rest of the family upside down. Ending a marriage may leave
a brutal effect on retirement savings, and meeting monthly expenses if
child support is not forthcoming. Let's discuss some things you may
want to consider prior to the divorce
Education about these financial implications of divorce can also same many
thousands of dollars. Yes, you heard us right. Knowing the laws in your
state is critical to making this a reality. Most states follow what is
termed "equitable distribution" approach is considered. In that
scenerio the courts are allowed to take into account how much income was
brought into the household by each spouse during the marriage.
In cases where a portfolio of stocks is an option, consider a list of possible
stocks to buy. The Street Quant Ratings have identified a handful of stocks
with serious upside potential in the next 12 month.
If you live in a "community property" system state like Texas,
California, Louisiana or Arizona, most property acquired during the marriage
aside from gifts or inheritances is owned jointly by both spouses and
must be divided 50 - 50 upon divorce.
If these assets were acquired during the marriage, like a home, land, or
retirement accounts, then they must be divided.
Be aware that Uncle Sam may attempt to seek wealth at the divorce settlement.
Tax consequences and other types of penalties must become a top priority
when reaching an equitable divorce settlement.
Be aware of the complications surrounding 401 (k) plans for employee and
spousal work locations. Decisions must be made about those dollars. Who
receives the funds, what penalties are assesed in what situations, and
withdrawals division are valid points to find out more about before the
divorce becomes final. Negotiation a qualified domestic relations order
is vital in this type of divorce. QDRO's can assign benefits from
401 (k) plans, as well as old fashioned pension plans too.
QDRO is prepared properly under the laws of each state, and any money removed
from the retirement account won't be subject to the early withdrawal
federal income tax penalty. Typically someone other than you is named
as a recipient of assets called an alternate payee, a former spouse, a
child or another dependent. A court decree can stipulate how the money
is to be transferred as a lump sum or in a series of payments over a specified
period of time.
For those facing and unavoidable financial expenses, which is often the
case in any divorce, remember this is a one time opportunity to get some
of that money now to pay current bills. It must be spelled out clearly
in the order on which the court signs off.
When rolling money into new retirement accounts, you need to realize ahead
of time there is a need for ready cash, if you don't plan for it,
it will be too late; and early withdrawal penalities may apply. For cashing
out, claiming assets like selling off stocks and bonds, cashing out certificates
of deposits, clearing out bank accounts, these will all be discussion
points prior to formal ruling of settlement has taken place.
Survival financially after divorce is the best possible way to eliminate
undo stress on the situation. Educating yourself about the economic implications
of ending a marriage can save many thousands of dollars if you plan ahead.