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Financially prepare for your divorce for a smooth transition

Getting a divorce has many emotional as well as financial facets, from deciding on the division of property and separating a household into two to the excitement of starting out a new life on your own. There can be a number of pitfalls in any divorce, including one not many Texas residents consider during the difficult emotional aspects of the divorce process, and that is learning how to adjust your financial outlook. Going from a dual income household to a single income household can impact your finances in a number of ways.

When you seek out a divorce attorney, some experts say you may also want to seek out a financial advisor to get you through the transition and on to a better financial footing after your divorce. For some spouses the change can be drastic because the other spouse handled all the financial details of the household and relationship. That can be a huge adjustment for someone to have to make. If you were not in charge of the household budget and paying the monthly bills, getting a divorce and suddenly being responsible for them can be a real eye-opener.

Some of the tips offered by others who have been through a divorce and made some financial mistakes are to seek advice sooner rather than later in the process. Knowing what the household's finances are is one step but also looking at all the credit cards and other accounts and assets in the marriage will help you determine a plan of action. There are also specific things to change after a divorce, including beneficiary information on insurance policies and savings and retirement accounts.

And don't forget to consider how your taxes will be impacted after your divorce. That is one area many couples face after the fact rather than before, which can make a big difference in how you should make certain decisions, such as who will claim the tax deductions for the kids in a joint custody scenario. Alimony or spousal support is also another area that could impact taxes, it may be considered tax deductible for the person paying it but the person receiving it has to report it as taxable income.

All of these issues should be considered before or during the divorce process, not after when it may be too late to change the divorce settlement.

Source: The Durango Herald, "Before divorce, prepare yourself financially," Hadley Malcolm, Sept. 14, 2012

Our Brazos County law firm handles a wide range of Texas family law issues, including divorce, child custody and divorce mediation.

1 Comment

It is difficult to manage financially after a divorce, as while you do get some state support if you're on a low income, clearly you've two homes to support now. Some people I know have a 'nesting' arrangement where the parents buy a small flat and come and go to the family home, depending on whose turn it is to be with the children.

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