Financial mistakes can often be the most common and costly mistakes. In many cases, one person manages the finances and the other has no clue. This can create a serious issue for the person that doesn’t fully know much about the household finances. If you are planning a divorce or you suspect your spouse is planning to divorce you, it’s a good idea to make copies of financial and bank account records, including bank statements, tax returns, retirement accounts and even credit card bills to protect your financial assets. Coming up with an accurate budget to determine child support and alimony can be difficult and often gets underestimated. Once you’ve agreed to a settlement, it’s not easy to go back. Let your attorney or financial planner help come up with a budget that will meet your needs. You’re going to need to work with the other party to help minimize the tax burden when going from one tax return to two individual returns.
If your last tax return is filed as a couple, you will both be responsible for any taxes due. You also may owe taxes on any assets you receive in your settlement. You may need to determine the actual value of a material settlement on an after tax basis. Couples in the heat of a divorce can often feel the need to hold onto certain assets, especially the family home. It’s an emotional time and you may not want to lose your home but be careful to fully consider the impact of taking on all the financial responsibilities that come with the home. Also, make sure the home is actually an asset and not upside down in value, like so many homes are today. Remember, you want to come out of the divorce financially secure, not burdened by a house you can no longer afford. If you’ve been married close to ten years, you are eligible to collect your spouse’s social security benefits when you retire. This is important if your spouse made more money than you. It will not have any effect on what your ex-spouse will collect. If you’re a few months short and this might affect your benefits, you might want to consider waiting. Don’t forget to change your beneficiary if you’re getting divorced. You’re ex-spouses name might still be on life insurance policies, retirement accounts and in your will. Also consider what might happen if something happens to your ex-spouse’s ability to work or they die. Like insurance that protects a married couple, both disability and life insurance should be considered to protect future child support and alimony that you are depending on. Once a settlement is offered, make sure you fully evaluate it. Take into consideration the changes that are about to occur in your financial situation. Things like inflation, lack of second income, taxes, health insurance and expenses regarding children that may come up. A divorce attorney can help you evaluate and analyze the offer and make sure you’re covered for your new life. It’s good to keep in mind that it’s more expensive to operate two households. Every divorce presents its unique challenges and it’s important to work with an attorney who is sensitive to the situation and can explain the process from start to finish. Collis & Griffor will help ensure that nothing is overlooked as you go through this life altering process. Collis & Griffor primarily serves the cities of Ypsilanti, Ann Arbor, Canton, Saline and Belleville and the counties of Wayne and Washtenaw, although we extend our legal services throughout the State of Michigan. If you are looking for a divorce attorney Ypsilanti MI, call Collis & Griffor, PC today at 734.827.1337 or contact us to set up an appointment for a free consultation.