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Ugh. Divorce. Although it may seem like it, the world is not coming to an end – your world is just changing. When your “happily” turns out to be not so ever-after, consider these tips to help you get to the other side of the rainbow.
Look for a divorce attorney. Ask for referrals from friends and family. Take your time to interview multiple attorneys until you find one that you feel comfortable talking to and who will approach the divorce your way. Follow your instincts.
Understand that you are different. The circumstances surrounding each divorce are unique. While you are leaning on friends and family for emotional support, be careful not to draw any conclusions based on their experiences. Also, keep in mind that the law, not necessarily your needs, will determine what you’re entitled to in the end.
Think through the assets. Your attorney will guide you in determining how to split property, but in making these key decisions, consider the following:
- Don’t ask for the home if you can’t afford to maintain it.
- Consider taxes in valuing property. Retirement assets (i.e., certain IRA’s and 401(k)’s) will be taxed as ordinary income when withdrawn. You may also pay tax on the sale of property or investments that have increased in value.
- Protect yourself when dividing debt. Consider an indemnity clause in the decree that will allow you to take action if your ex does not pay on a debt. Also, consider a refinancing clause for secured debts (i.e., home or car) to remove your name from any liabilities to be paid by your ex.
- If there are company sponsored retirement plans to be split (i.e., 401(k) or pension), familiarize yourself with the use of a Qualified Domestic Relations Order (QDRO, commonly referred to as a “quadrow”.)
Don’t forget life insurance. If spousal or child support is in play, consider life insurance on your ex to protect future payments.
Find a planner. To help ensure that you are looking at the big picture, consider working with a financial planner. A planner can provide referrals to, and play quarterback for, many key professionals you may want to consult, including a CPA, estate attorney, real estate agent and mortgage broker. More importantly, a planner will help you plan for your new future.
While sipping on the apropos green cocktail tonight, know that green is the color of life, renewal, freshness and harmony. Cheers to that!