Separate Your Assets

Separating the marital assets can be a difficult task, especially if a large amount of assets has been accumulated during the marriage. You will need to decide which assets you want to keep and which ones you are willing to let go of. If possible, sit down with your spouse and discuss it. If this is not possible then it should be discussed through your attorneys. Ignoring this step can create serious long-term damage to your credit and financial health. If your spouse has debts, be sure that they are taken out of your name prior to finalizing the divorce and removed from your credit report. If you wait until things are finalized, it may be next to impossible to get them removed. You should also close any joint checking or credit card accounts before finalizing the divorce.

Who Gets the House

This is a tough decision for both parties. You have built a life here and probably have some happy memories wrapped up in these walls. It is understandable that you would want to keep your home but you need to consider the financial aspects of this decision. Is the spouse that wants to keep the home financially able to support it? Remember that you had two incomes to support the expenses of managing the home during the marriage. Can the income of just the one spouse still maintain those expenses? Although painful, it is usually the best approach to sell the marital home, split the proceeds and move on.

Updating Your Will

When going through a divorce, both parties will need to update their wills and other legal documents regarding who are to be designated as beneficiaries. Failure to do this can create difficult legal battles down the road for your survivors if not properly dealt with. 

Taxes

In the event that you receive maintenance or alimony payments, these are typically taxable and need to be documented and reported on your income tax. Child support payments are not taxable. Be sure you keep accurate records of both for tax purposes to avoid errors on your income tax returns.

Setting A New Budget

During the stressful ordeal of the divorce it is often overlooked that a new budget needs to be designed that reflects the adjustment to a single income for the household. This is imperative when deciding on asset distribution during the divorce and for financial stability once everything is finalized. Failure to set up a sound budget can lead to financial difficulties and large amounts of debt. In this case you might then be forced to seek the services of a debt relief company. A little planning now can save you a lot of stress down the road.