Finalizing your divorce can significantly change your lifestyle, especially if you are coming from a long-term marriage. The financial aspect of your current and future plans is something you will have to consider especially carefully.
Without a solid roadmap planned out ahead of time, there is a strong possibility that you will face certain financial issues following your divorce. Familiarize yourself with these common obstacles today so you can plan accordingly in the days and months to come.
Affording the family home
The circumstances of your divorce might lead to you maintaining ownership over the family home after the split, especially if you receive primary custodianship over your children. Affording a large home that you previously shared with your spouse might be difficult after transitioning to a single income, though, so it is worth considering a downsize if it becomes a financial concern.
Fulfilling tax obligations
The tax implications of a divorce can come as a surprise to couples who begin the process without a full understanding of their obligations to the IRS. Reviewing the common tax effects of divorce as outlined by the IRS can help you stay one step ahead.
Maintaining your retirement plans
Retirement account contributions made during the course of a marriage are marital assets in the eyes of the court. This means that they are subject to the division of marital property during the divorce process. If you made significantly more contributions to a retirement plan compared to your spouse, you might find yourself with fewer retirement assets in your possession after the split.
There are likely to be many new difficulties to navigate as a recently-divorced individual. Financial issues can add extra layers of complexity during an already strenuous time, so it is important to make the right financial preparations as early as possible.