Financial Tips you Need to Know During a Divorce
Here are some tips to help you handle your investments during a divorce:
Know What’s Your Fair Share
Half of everything is yours. Under Pennsylvania Law, property acquired during marriage must be equitably divided between the divorcing spouses. This process is not only a matter of establishing who will retain the family home or who will get which car. Other assets that are harder to value, including pensions, investments, and businesses, must also be included in the original property settlement agreement
Consider hiring a financial planner or accountant to work with you and your divorce lawyer to help prepare and protect your long-term financial future. Most people only focus on the immediate task of dividing assets and setting up alimony and child support. When making these decisions, you should keep in mind what things might be like in 10 to 20 years. If you have young children, they will start applying to college quicker than you expect. This is something you may want to account for in your divorce settlement.
This is a good time to tweak your retirement plan. The strategy you set up with your spouse may be too aggressive and risky for your solo saving goals. This is an opportunity to create a more secure and comfortable portfolio.
Beware of your Liability
If your past joint tax returns overstated deductions or omitted income, you may be held liable for these mistakes, even if they were made by your spouse. If you signed the tax return and had knowledge of the deficit, you are equally liable. Talk to your Pennsylvania Family Law attorney about an indemnification clause to protect yourself if there is a chance that you will be audited.
Hidden debt is an unpleasant surprise common among divorcing couples. You are responsible for any debt incurred during the marriage. If you and your spouse hold joint credit cards, you can be held liable for any debt they piled up.
Separate your Everyday Finances
Before starting the divorce process, separate your finances from your spouse, so that you have access to credit and funds. Open a checking account and get a credit card in your name. Then, gather and make copies of all financial documents—including tax returns, payroll statements, investment accounts, retirement plans, mortgages, and credit card statements. Your Pennsylvania Family Law attorney needs this information to protect your investments.
At the Law Office of Smith & Horwitz, our Philadelphia equitable distribution lawyers have more than 35 years of experience assisting divorcing or separating couples with their marital property, community property and separate property concerns. From family homes to inheritances, we understand how to classify and value property to create property settlement agreements that are in the best interests of our clients. Let us help you. Call us today at 215-545-2880 to arrange a consultation with one of our experienced Philadelphia equitable distribution of property attorneys.