Keeping finances in order during a divorce

| Aug 13, 2019 | Divorce |

Divorce can be a financial strain for many people, but individuals in Connecticut can prepare by understanding their financial situation and making a plan. The first step is to make a monthly budget. This will probably be short term as a person gets a handle on expenses. It may need to account for items such as getting insurance and a new place in which to live. This budget can carry an individual through the next few months before making a longer-term one.

The budget should include an estimate of divorce costs. Researching Connecticut divorce laws can help prepare a person for what to expect. Dividing property fairly will also be important for financial security. The person who decides to keep the home should make sure that doing so is affordable. Some retirement accounts are taxed on distribution, so their dollar amounts may not indicate their true value. If a couple is in debt, they should strive to pay it off before the divorce is finalized. Otherwise, they will need a plan to continue paying after the marriage is dissolved.

Once the divorce is finalized, there may be additional tasks to complete. Couples who have not yet separated their accounts or removed former spouses as authorized users on accounts should do so. Estate planning documents might need to be updated.

A lawyer may help someone negotiate a divorce settlement instead of going to court. In some cases, the process of property division may be particularly complex. For example, certain assets, such as art, can be difficult to appraise accurately. If one person owns a business, the other individual may be able to claim a portion of the company’s value. To divide certain retirement accounts, such as pension plans and 401(k)s, it is necessary to prepare a complicated document called a qualified domestic relations order.

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