Common Financial Challenges for Couples Facing Divorce

Divorce isn’t just a couple choosing to go separate ways. In fact, there are several financial repercussions that couples often don’t realize in the beginning until they have filed and are working through the mediation process. Regardless of if you are thinking about filing a divorce or if you are currently in the process of doing so, knowing the most common money issues that need to be addressed is beneficial.

When a divorce involves money, it can quickly become a difficult situation. While you and your soon-to-be-ex may be able to reach an amicable agreement, in other cases, you may need the help of a divorce lawyer in Coral Gables to ensure your future and best interests are protected.

Division of Debts

Most married couples accumulate some amount of debt. Whether the debt is in the form of a mortgage, car loans or credit cards, they have to be divided during a divorce. Determining who is responsible for the debt is one of the most challenging parts of the divorce. This decision should never be left to your partner. While you may trust them now, divorce may create strong emotions and tension that result in the individual neglecting certain debts out of spite.

When you divide the debts, you have several options:

• Pay the debts off jointly prior to filing for divorce
• Agree that any debt incurred prior to the marriage is that persons
• Agree to take care of certain debts and include these in the divorce agreement
• Share the debt responsibility

Taxes

While you may think of all the obvious financial challenges during a divorce – mortgages, debts, bank accounts, etc. – you may forget about your taxes. This could cost you thousands if the situation is not handled properly. Some factors to keep in mind include:

• Who is claiming the dependents?
• Who is claiming Head of Household?
• Who is claiming the divorce fees, which are considered tax deductible?
• Who will make maintenance payments (alimony and child support) that are tax deductible?

Retirement Plans

Both people may have their own retirement plans, which can make dividing the assets easier. However, you still need to change the beneficiaries on the retirement plans to someone besides each other.

Spousal Support and Child Support

If you are unprepared, then spousal and child support can represent a challenging situation. Spousal support and child support are amounts that are based on the gross income and current lifestyle. Also, child support amounts are going to be based on the amount of time the noncustodial parent spends with the children. This is why it is important to consult with a divorce lawyer in Coral Gables.

If you are facing a divorce, there is no question that the process can be emotional and challenging. If you need help, or more information contact the Estevez-Pazos Law Frim, P.A. today.