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Financial issues to consider during a divorce

When pursing a divorce, individuals in Texas might be concerned with securing their finances. In order to create a solid financial foundation for life after the divorce is over, both parties may need to review and understand their current economic situation. It might also be necessary to make projections regarding the expenses the couples may face as they negotiate property division and support obligations.

There are a few things that a person might consider during proceedings. One issue involves understanding the taxes that might be levied on certain assets. In particular, the division of retirement plans can have significant tax consequences. In this regard, it will be necessary to obtain a qualified domestic relations order when dealing with an employer-sponsored plan. Traditional IRAs are treated differently than Roth IRAs when it comes to withdrawals as well.

It might also be beneficial to take steps regarding joint liabilities. Before a divorce is finalized, the couple should take steps to either settle the accounts or transfer the obligation into the name of the person who will be taking it over. If the couple still has a jointly held mortgage, seeking to refinance the loan might be one option for moving the balance into one person's name. Doing this early may be important because a lender will normally not consider a settlement agreement as evidence of a discharge of liability for an outstanding balance.

Because both parties to a divorce have an interest in providing for their own futures, property division issues can become contentious. However, a person going through the process might work with a family law attorney who has experience with divorce cases and who can assist in negotiating a settlement agreement.

Source: Forbes, "6 Money Matters Divorcing Spouses Often Overlook", Leslie Thompson, August 19, 2014

Source: Forbes, "6 Money Matters Divorcing Spouses Often Overlook", Leslie Thompson, August 19, 2014

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