People in Maryland know that divorce can be very difficult on a person. Divorce can substantially alter aspects of one’s personal life, not the least of which is a person’s financial situation. The prospects of such dramatic changes can be daunting, but with the help of an experienced divorce attorney, there are many things that a person can do to ensure continued financial well-being during and even long after the divorce has been finalized. People over 50 with significant assets in particular need to take extra precautions to protect themselves during the divorce.
Community colleges and local organizations offer classes for adults on personal finance that can prove beneficial in the event of a divorce. A better understanding of the laws governing retirement accounts, gift taxes and investments may come in useful in this context. However, seniors in particular should watch out for scams advertised as seminars – usually with some kind of a free meal offered along with financial tips – as the AARP notes these can be attempts to defraud them. It’s also important make sure insurance policy and retirement plan beneficiaries are updated after a divorce, so the funds do not inadvertently go to the former spouse.
Most divorce settlements contain some element of spousal maintenance, or the amount of money a person will have to pay their ex-spouse, generally on a monthly basis. This amount is generally dependent upon the income of the paying spouse, and the expectations and necessities of the ex-spouse. Spousal maintenance also goes hand-in-hand with asset division, in which the couple splits up the eligible marital property between them. Both alimony and property division have their own unique tax benefits and challenges, especially when a person has large amounts of property or complex holdings diversified over assets such as business holdings, stocks or retirement accounts.
When it comes to the challenge of properly valuating these holdings, the potential for litigation also increases substantially, which could make for a longer divorce settlement process. It’s very important for a person in a complex divorce to consider these issues with their attorney prior to deciding upon a course of action to pursue in the divorce settlement.
Source: Huffington Post, “Financial Tips That Ease the Sting of Divorce,” Julian Block, Dec. 25, 2013