People in the midst of a divorce are under stress and may not have a perfect recall for one reason or another. Make sure you take a second look at your numbers. Be careful to double-check everything. Your numbers will impact the rest of your life. Here are some fine points to ponder:
1. Did you get the facts?
Don’t guess on employee plan account balances:
For example: You and your spouse are working on your assets/liabilities lists. Your spouse says that his/her IRA is about $10,000 and 401(k) is about $30,000, and that there are no other plans. Take notes, but get the actual statements and lists of plans. It may be an innocent slip of the mind, but plan balances are often much different than what spouses recall. And, unless you check with your spouse’s company on the benefits it offers, your spouse may be omitting another plan – think stock options, non-qualified plans or defined benefit plans.
2. Did you include all your expenses when figuring out what you need to live on in the future?
When people complete disclosure statements or budgets of what expenses total, they often forget:
- Quarterly income tax payments for taxable maintenance
- Replacement costs for an old auto (budget a car payment)
- Fix-up costs for home repairs (roofing/siding) or appliance replacement (budget a home equity loan payment)
- Long term care premiums, if applicable
- COBRA and post-COBRA payments for health insurance
- Any other costs that may have been postponed during the divorce process.
Linda Forman, CPA, P.C., has practiced financial and tax guidance, retirement planning, and ERISA issues, litigation support, and other areas of accounting in the Chicago area for over 30 years. She can be reached at (847) 316-1040. View her Divorce Magazine profile.