When Arizona residents are in the process of getting a divorce, they don’t want to make any financial missteps that could prove to be extremely costly down the line. Yes, the family law courts seek to provide fairness in their rulings, but there are times when the parties themselves may be making mistakes that the court doesn’t need to correct or doesn’t have the information to correct.
According to a recent article, there are a number of financial mistakes that divorcing couples need to avoid. The most important one has to do with the family home. Should you keep it, or should your soon-to-be ex-spouse keep it? Should either of you keep it? For most married couples who live together in a house, there are two incomes that are coming in to help with mortgage payments and upkeep of the home. Those costs may be too great of a burden for newly single people.
Next, if one of the spouses will be keeping the house, what are the assets that are being given up in return? The recent article noted that spouses who are keeping the house instead of liquid assets should think twice about whether or not that is the right decision.
Lastly, Arizona couples who are going through a high-asset divorce should think about the tax implications of their split, mostly when it comes to funds in retirement accounts. The article noted, for instance, whether it is better to take a retirement account flush with funds over a checking or savings account with the same or even a lesser amount. When withdrawing money from a retirement account, there will be potential tax penalties to consider.
Source: cnbc.com, “When it comes to divorce, not all assets are equal,” Sarah O’Brien, Sept. 22, 2017