Divorce is an emotionally charged, tumultuous time for most couples. In addition to the difficulties separating your life from your former spouse’s, you may also undergo financial stress as you split your income and assets.
Remember that the financial hurdles associated with divorce involve more elements than going from a dual-income household to a single-income household. Learning to navigate the hurdles can ease your stress throughout the process.
Splitting assets according to tax ramifications
When dividing assets, some couples do not consider how taxes may impact those assets. For instance, couples may split and believe that they split the assets evenly when the tax implications give one partner much less. Assets that tend to carry tax implications include stocks, property and pension payments. Valuing assets with taxes in mind can make the process fairer for both parties.
Seeking stability with financial planning
Following a divorce, you may struggle to imagine what your life looks like. How can you adjust your budget to meet your needs? How can you ensure that you maintain financial stability? To establish a budget after the divorce, you have to be able to collect and organize all of your financial information, including assets, income and debts. Generally, people underestimate the types of expenses they have after a divorce. Think about inflation rates and all costs associated with your lifestyle.
When creating a clear and effective financial plan, you may benefit from the help of a financial advisor or professional who can help you manage the bigger picture.