Ending a marriage means untangling everything that the couple built together, from bank accounts to assets to debts. Depending on the type of assets a couple has, this can be a complicated affair.
Almost all divorces have some complexities involved, as they encompass many elements of your life—many which are finance-related. And money can be a difficult subject for many people to discuss, especially when they are ending a marriage. They want to get what they deserve, and understandably so. Here are just a few of the ways that a divorce will impact your financial matters.
Dividing assets can be a contentious matter, especially if both parties want the same things. Of course, both spouses will want the larger share of the bank accounts, but you may not be expecting your husband to want half of your jewelry or your wife to want your beloved sports car.
Virginia is an equitable distribution state, so assets are split fairly. If your wife does want your sports car, for example, what do you get in return? Do you get to keep the other car? There needs to be a fair division. And if neither of you wants a certain asset, then you can sell it and split the proceeds.
So many people are wrapped up in what they are getting out of a divorce that they forget one thing — tax consequences. Depending on your assets, your liability could be thousands of dollars. This is when having an accountant on your side can be helpful. You will want to know what expenses are tax deductible and how to get tax exemptions for your children. Tax laws are always changing, so never make assumptions.
If you have retirement savings, then keep in mind that your spouse could potentially get half of it. If they have a retirement plan but you do not, you could get half of theirs. You could use this money for retirement, a new house, and other expenses. Typically, an early withdrawal means you will have to pay a 10% penalty, but you can avoid this by following IRS regulations.
Saving for retirement can be challenging if you have a gray divorce (a divorce when a person is age 50 or older). Getting divorced so close to retirement may require a change in plans, especially when retirement accounts are split in two. How will you save up for retirement? Will you need to take on another job? Will you have to delay your plans?
Finances are a common concern in a divorce, and with good reason. A person wants to leave a marriage financially comfortable, as they will be on their own. They will no longer have a spouse to help them out.
The divorce attorneys at the Virginia Family Law Center can help you deal with assets, money, taxes, retirement, and other financial aspects. Knowledge is power. To schedule a consultation, call our office or fill out the online form.
At Virginia Family Law Center, we protect clients’ rights and help them understand the legal processes they are working through. Schedule your 30-minute telephone consultation with an experienced lawyer by filling out the form below.