No one goes into a marriage prepared for it to end, though many people in the United States go through a divorce at some point in their lives. It tends to be a slow burn that occurs from a variety of different factors, like race, religion, finances, infidelity or lack of communication. When facing a divorce, there can be a million questions racing through your mind, making it difficult to think clearly and ask your divorce attorney the important questions.
It’s normal to feel protective and defensive throughout the course of a divorce, especially when it comes to your finances. Take a look at these top financial questions to ask your divorce attorney so you can be prepared for whatever comes.
Who’s Responsible for Debt Repayment?
Determining who is responsible for repaying any debt incurred during a marriage is often one of the more difficult aspects in a divorce. The first step in doling out debt repayment responsibilities is to figure out how much you owe, and to whom you owe it. Nearly 90% of families in the U.S. are in debt, whether it’s from a mortgage, home renovations, car loans or something else.
Get an updated credit report to serve as an audit of all outstanding shared debt and debt in your spouse’s name only. With this information, consult with your divorce attorney on the best course of action and take steps to prevent debt from growing further. Once you’ve taken stock of how much debt is shared and how much is under the name of your spouse, your divorce attorney can move forward in determining who’s responsible for what debt.
What Happens to Our Retirement Savings?
If your spouse has been putting away funds for retirement during the marriage, you might be entitled to half of that money. While this money doesn’t necessarily have to be put towards a retirement plan, it’s likely that your individual financial needs will grow in retirement when not supported by those joint funds of a spouse. Of course, there’s the 10% penalty for withdrawing those funds if you don’t properly adhere to IRS guidelines – ask your divorce attorney about these considerations as well to avoid any undue fees.
Consult with your divorce attorney about splitting retirement assets you and your spouse have gathered, and what you should do with those funds to stabilize your finances in preparation for retirement.
What Tax Issues Should I Prepare for?
With several big picture concerns to consider like child custody, asset division, etc., something like tax issues can be long forgotten until it’s too late. Under the “tax issue” umbrella, there are several questions you should be asking your divorce attorney, like “Who claims the Head of Household status?” “Is child support tax deductible?” “What actions to I need to take to readjust my taxes to remain compliant?
While a divorce attorney isn’t an accountant, they can steer you in the right direction to ensure your tax concerns are addressed and you avoid any penalties or missed opportunities for tax breaks.
Talk with Your Divorce Attorney About These Often-Overlooked Questions
The divorce process is a trying and taxing event for anyone to go through, with emotions and exhaustion carrying the potential to cloud judgement and get you into trouble down the line. Educate yourself on all aspects involved in a divorce and be sure to ask your divorce attorney any and every question you can think of.
At Daniele Johnson & Associates, we’re here to answer your questions and ease your concerns to make the divorce process as painless as possible. Call us today at 470-746-6485 to consult with a divorce attorney and put your mind at ease.