“What are your best tips to make certain I come out of the divorce as financially sound as possible”
First and foremost, enlist the assistance of a divorce financial expert. This is the biggest financial decision of your entire life, and you are under extraordinary stress and likely not able to make your best decisions. This is especially so if you are not accustomed to making significant financial decisions. Remember, your attorney is likely not trained in financial matters, and will probably have you sign a waiver of responsibility for financial issues related to your divorce.
That said, be clear about your living expenses and future financial needs so you can sustain a lifestyle as near to what you are accustomed with as possible. This is not to be taken lightly. Most people do not realize what it actually cost for them to live as they do. This exercise requires hours of tedious work and diligence.
Regarding the division of marital assets, strive for a balance of liquid and non-liquid assets so that you have future financial flexibilities. Then, know and understand the tax implications and responsibilities attached to certain assets that effectively reduce their real value. For instance, a $200,000 IRA has a net value of only $150,000 to you if you will need to pay $50,000 in taxes when those funds are accessed. On the other hand a $200,000 Roth IRA has no taxes due and is really worth $200,000 to you.
Understand that while there are many complex tax issues to be considered in divorce, some issues are unique to divorce that most financial generalists do not readily know. If it sounds complicated, that’s because it is.
Rosemary Frank, is a financial service professional. Rosemary is the founder ofDollars of Divorce. Where she does a professional analysis of the marital assets, the effects that a settlement will have on your financial future, as well as all other factors with an overall impact for you to maintain your standard of living. You can reach her at (615)595-6850 or firstname.lastname@example.org.