Going through a divorce can be costly for many couples in Nevada and across the country. According to recent findings, 3.2 annulments and divorces occurred per 1,000 individuals during 2014, with a large amount of them occurring in January following the busy holiday season. While many couples may try to rush through the process, they could make hasty financial decisions they will later regret. For instance, someone could take from an IRA in order to erase a joint debt. However, in doing so, the person jeopardizes his or her retirement prospects while generating penalties and losing deductions. Here are some tips to help couples avoid financial problems during the divorce process.
One way to avoid an expensive divorce is if both parties have a thorough knowledge about all their assets. Otherwise, one party could receive an unfair settlement during the negotiation process. Some of the assets that should not be overlooked are inherited cash and property, pensions, start-up stock options and retirement contributions. In addition, titles and deeds need to be updated with the name of the spouse who received the property, as well as beneficiaries who are named in a will or life insurance policies.
It is also very important to divide joint assets and accounts before the divorce. Joint accounts should be closed and replaced with individual bank accounts to avoid liability issues. The parties should also alert insurance providers and credit card companies of the divorce so that one spouse will not become liable for the other's bills. In addition, titles and deeds need to be updated with the name of the spouse who received the property, as well as beneficiaries who are named in a will or life insurance policy.
Those who rush through divorce proceedings might overlook important financial aspects. However, an attorney who is knowledgeable in family law may prove invaluable to helping protect a spouse's financial interests during the process.
Source: CNBC, "Breaking up is hard to do: Protecting assets in divorce", Kelli Grant, Jan. 17, 2016