Financial Planning for Divorce – Taking the First Steps

 Posted on October 06, 2017 in Divorce

A divorce can be a complicated and arduous process because there are numerous potential pitfalls and challenges – and money is often the most significant concern. However, many parties overlook important financial planning details when they first file for divorce. The result of this oversight can range from a minor loss of some funds, to complete financial devastation. Learn how to mitigate against the potential money issues in your Illinois divorce with effective financial planning, and discover how an experienced divorce lawyer can help.

Start Your Post-Divorce Budget Now

It may seem a bit premature, planning your post-divorce budget now, but having an idea of how much money you will be bringing in (and what you expect to spend) as you work through the divorce process can save you a great deal of time, money, and stress in the future. Consider also how you plan to spend your post-divorce settlement. Will you sell the house and move into a smaller place to give yourself more financial breathing room each month? Who will pay for the kids’ college expenses? Also, do not forget to save for personal goals, such as vacations or a new vehicle.

Your Spouse’s Social Security Benefits (Is Remarriage an Option?)

If you and your spouse have been married for at least ten years, you may be eligible to receive payments based on your spouse’s Social Security account, once you reach retirement age. However, that benefit disappears if you remarry. Before you say “I do” again, stop to consider if you may be at risk for a financial loss during retirement. Compare Social Security benefits available to you from your ex-spouse’s account to those from your potential spouse’s account. If your benefits from your ex’s account would be higher, remarriage may not be in your best financial interest.

Counting Alimony as Income

If you believe that you may be entitled to alimony in your divorce, it is important that you understand that it is considered taxable income by the Internal Revenue System (IRS). That can affect everything from your tax return (where you are required to report the alimony) to your annual refund amount or tax obligation. Alternatively, if you believe that you may be required to pay alimony, know that you will be permitted to take it as a tax deduction.

Contact Our Hillside, IL Divorce Lawyer

Planning for the financial aspects of your divorce is more than just savvy – it is exactly the type of preparedness that can protect your financial future, long after the divorce has been finalized. However, the complexity of divorce law can leave you at risk for costly mistakes. As a result, divorcing parties are encouraged to ensure they have savvy legal assistance on their side, from the beginning. Contact our Hillside, IL divorce lawyer for a no-obligation consultation to get started with your case today.

Source:

https://www.cnbc.com/2017/10/02/financial-planning-for-divorce--its-not-just-for-women.html