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Common financial concerns not to overlook in divorce

When Texas couples go through a divorce their finances have to change. Without knowing what to expect or how to handle issues like transferring assets correctly, spouses might find themselves unprepared for living on their own once the marriage ends. Being prepared for common problems might help someone emerge from a divorce with a secure financial future.

Dividing assets in a divorce is necessary, but not going about it the right way may lead to unnecessary taxation and other losses. The actual value of assets can change drastically when taxes come into play. For example, most couples have money in retirement accounts. To transfer them without getting taxed, people should pursue a qualified domestic relations order. For IRAs specifically, a divorce decree should state that the benefits should be treated as a transfer incident to divorce.

An immediate need for many people is cash. Some assets are liquid, while others are not. If people have enough cash to live on for the foreseeable future, cash flow is not as much of a concern, but for those who require access to money might need to consider an assets liquidity as well as its value. Additionally, couples must decide what to do about joint liabilities, but they should be aware that lenders will still hold both people responsible unless debts are resolved or transferred into one person's name. Finally, if spouses want access to digital assets, they may need to discuss these properties during negotiations.

Divorce offers a new beginning for people, but starting that new life on the right foot can be more complicated than people realize. An attorney could help people assess the value of their marital assets, understand tax implications and come up with settlement ideas to meet their unique needs. If negotiations fail, an attorney could fight for an equitable settlement in court.

Source: Forbes, "6 Money Matters Divorcing Spouses Often Overlook", August 19, 2014

Source: Forbes, "6 Money Matters Divorcing Spouses Often Overlook", August 19, 2014

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Bruce Turner

In addition to his law degree, Bruce Turner has a master's degree in tax law and is Board Certified in Commercial Real Estate Law by the Texas Board of Legal Specialization.

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