Top Issues Included In Divorce Settlements
A divorce settlement can be quite a complicated one when the number of financial issues is more in number. If it is the case with you and your spouse, it is better to get guidance from a tax planner or an experienced accountant before you finalize your divorce settlement’s terms and conditions.
Key issues in a divorce settlement
Based on the scenario that may vary from couple to couple, a divorce settlement could cover some of the following issues:
- Life Insurance
- Retirement Plans
- Investments and Bank Accounts
- Split of marital assets like vehicles, vacation home, and house
- Debt that has been accumulated while the couple was married.
Here are some of them in detail for you to understand then properly.
Distribution of marital assets
The real concern here is how the house or the vacation home of the couple can be split between the two. Now, they can be taken care of in a number of ways:
- There could be refinancing of the house so that one spouse can purchase the other party’s interests.
- One of the spouses can get the outright ownership of the house.
- The couple may decide to sell the house and then the sales proceeds are divided between the wife and the husband.
Investments and bank accounts
In some cases of divorce settlements, one party will retain the own ship of their matrimonial house while the other spouse may get cash from their joint investment accounts or bank accounts. The spouse who has been awarded the said property as a divorce settlement should take the necessary actions to make sure that there is adequate cash flow at their disposal for covering the living costs.
In many occasions, it is not unusual to see the inclusion of a provision in divorce settlements specifying that whichever spouse is paying for alimony r child support should have purchased life insurance policy so that the costs of such payments are covered in case of their unexpected death. In case you are getting those payments, you need to ensure that you also own that insurance policy. In order to ensure that the premiums of the policy are always paid on time, you must ascertain that you actually own it. This measure will help you to be sure that you do not have to face a financial disaster when something unfortunate happens to your ex-spouse.
When a divorce settlement has funds from a particular retirement plan, it is better to get in touch with a financial advisor to ensure that you appreciate the impact of tax implications in this type of situation.
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