Divorce can be an overwhelming time financially, as the decisions one makes during divorce proceedings can have long-term implications. Failure to analyze a potential divorce settlement from all angles may cause a person to hurt him or herself monetarily in the long run. A few tips, however, may help divorcing individuals in California safeguard their finances by allowing them to make educated decisions.
First, it is important to calculate how much it will cost to eventually sell or dispose of assets that are part of the marital settlement. For example, a person may be given a rental home and later decide to sell it. In this case, he or she can expect to pay capital gains taxes on the proceeds from the real estate transaction. General expenses related to the sale and real estate agent fees are also costs worth considering when selling this type of asset.
It is additionally wise to look at one’s divorce settlement as a big puzzle with many pieces rather than simply looking at one or two areas. For example, an individual might desire to get more alimony and agree to take less in child support. However, the person may not realize that alimony actually counts as income, thus costing more in the long run than child support.
When going through a divorce in California or elsewhere, it can be challenging for two individuals to see eye to eye on how to address financial matters pertaining to the split. However, if the two parties are willing to make compromises and mediate the issues, they may end up with a settlement that is beneficial to them both. Both individuals have the right to pursue a result that will help them financially both now and in the future.
Source: USA Today, “5 biggest divorce mistakes financially“, Wendy Spencer, March 7, 2015