Louisiana spouses may be impatient to move on with their individual lives once a marriage is over. No one experiences a pleasant divorce, so it’s understandable spouses want to put the process behind them quickly. Hurrying to divide assets while distracted by emotions can be detrimental to your financial future.
What you have now in marital assets might be worth more or less in the future. Those economic fluctuations must be factored in if you hope to reach a fair property settlement. A settlement strategy should include knowledge of current and future values of marital assets to be divided.
Do you know the tax implications of selling a former marital home or transferring funds from a divided retirement account? If not, it’s time to find out by gaining financial knowledge or find a professional who can explain the short- and long-term effects of transferring or selling major assets like pensions and real estate. Financial and legal advice now can save you the heartache of considerable, overlooked penalties later.
For instance, you pay no taxes on distributions from Roth IRA accounts, since the funds that were put into them were taxed in the past. However, untaxed money is used to fund 401(k) plans, which means the government expects to collect its fair share once the funds are distributed. Capital gains are also taxable, which can hit some post-divorce homeowners hard during a sale.
Financial counselors may suggest ways to set up an individual budget, eliminate debt before divorce and other strategies to prepare for the single financial life ahead. It’s worth slowing down to take an assessment of assets and to plan carefully for the future.
Divorce attorneys agree: Once you’ve agreed to the terms of a divorce settlement, it’s difficult if not impossible to undo them. Know the value of the assets you are negotiating, so divorce choices don’t come back to shock you later.
Source: Forbes, “6 Money Matters Divorcing Spouses Often Overlook” Leslie Thompson, Next Avenue, Aug. 19, 2014