Divorce Process - A Financial Perspective | Cash Flow Planning for Life

The Divorce Process – From a Financial Perspective

Posted by Mark On October 20th

Thinking about getting a divorce?

Interested in making the proper preparations to protect yourself financially?

Do you want what is in the best interest financially for your family too?

You know divorce is a life-changing event, and you have heard It affects over 50% of couples in the U.S. But understanding all the aspects of a divorce is more overwhelming than you thought.

Without the proper planning, it can be devastating emotionally, mentally, and especially financially. With proper planning, it is possible to move forward and get through it.

If you are working towards a non-contested, respectful and collaborative divorce and need guidance to make that happen, consider these tips from experiences I have had. However, if you are working with a contested divorce, brace yourself, there is no way to “plan” for that.

Although, having everything in order is the first step either way.

Consider reviewing the following checklist as a helpful guideline.

#1 – Hire a Good Attorney –

Find a knowledgeable and dependable legal counsel that will assist you in legal advice and the necessary filings for a divorce. If collaboration isn’t going to work make sure you hire an attorney that knows the value of settling quickly and is willing to fight for you if they need to.

#2 – Gather Your Financial Documents

Make sure you have your financial documents in order before your first appointment with your attorney. You’ll need to complete a financial affidavit.

#3 – Initiate the Divorce – File the Petition

The Petition for Dissolution of Marriage is the first document to file with the court clerk to start the divorce case.

#4 – Know the Divorce Process

Discovery, custody evaluation, pretrial conference or mediation, trial, the decree of dissolution.

#5 – Separate Marital Assets and Personal Property

Make equitable distribution of marital assets and debts, with the goal of fair distribution.

#6 – Evaluate the Assets for the Divorce

Determine pre-marital assets. Move forward to current assets. Obtain appraisals by qualified third party if needed.

#7 – Divvy Up the Debts

Know the two forms of debt: living expenses and community property, and how your state distributes the debts.

#8 – Know the Impact the Divorce Has on Taxes

Initially, check the difference of tax rates, lost deduction and tax credits of filing separately verses jointly. Take advantage of any tax savings.

#9 – Understand Tax Preparation Timing During and After the Divorce

Be aware of two important tax dates: the date the divorce petition was filed and December 31 of each year.

#10 – Learn Your Rights in Florida Regarding Real Estate and Divorce

In Florida, “the marital home” is the piece of real estate property where your and your spouse spent most of your life together.

#11 – Define the Terms: Child Support and Alimony

In terms of cash flow and taxes these two terms couldn’t be more different.

#12 – Allocate Tax Carry-Forwards

Consider completing this negotiation prior to signing the martial settlement.

Makara and Associates, LLC, Has Your Best Interest in Mind

We believe that knowledge is power. We understand the importance of educating you so you’ll understand the entire financial process involved with a divorce.

Download for FREE our eBook: Divorce. What You Need to Think About From a Financial Perspective from our online library. You will come away with a few tips to help you through the divorce process.

If you need additional help from a CPA to assist you in sorting through your documents and divvying up your debt, let our professionals assist you with the financial issues that arise.

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– Mark