Admitting that your marriage is no longer working out is never easy. Even if you’ve known for quite some time that there’s something wrong, filing for divorce can still be a difficult pill to swallow. If you are seeking to initiate a divorce in New York, it’s crucial to do a divorce financial planning to avoid costly mistakes. Divorce financial planning must occur before, during, and after your divorce to protect your assets and fiscal interests.
Create Realistic Goals
One of the most significant benefits of financial planning during divorce is it helps to create realistic goals. The only way you will survive a divorce financially is if you outline clear financial goals before filing for divorce. For example, if you’ve been relying on your credit cards for the last 10 years, then being debt-free by the finalization of your divorce is not a smart goal.
Find Hidden Assets
A common problem that couples encounter during a divorce is hidden assets. Even though you lay everything out on the table, you get a sinking feeling that there might be more assets somewhere. It’s not uncommon for your attorney or financial investigator to find hidden assets. If you come across this type of asset, you could wind up with 100 percent of that asset in the divorce.
Create a Settlement Proposal
It could be in your best interest to create a settlement proposal when you prepare for divorce. Settling with your spouse outside of court can make the situation more graceful and tolerable. Going in front of a judge for your divorce can lead to asset loss. The judge will decide how to divide your assets; meaning you and your previous spouse will lose the power of choice.
Understand Tax Implications
There will be numerous tax implications on your life as a result of your divorce. This is why divorce planning is so significant. Whether it’s income taxes, capital gains tax, or real estate tax, you need to understand how all these taxes will affect your financial situation moving forward. If you fail to learn about the possible tax implications, you could be in for sticker shock when you file your first income tax return following the divorce. You should label your assets as pre-tax or post-tax to avoid this occurrence. The only way to reach this level of preparation is by financial planning before, during, and after your divorce.
Preparing for a Divorce? Divorce Financial Planning Can Make All the Difference
If your spouse approaches you about getting a divorce, your world will change immensely. What will you do with the family home? How will the assets be divided? Will you walk away with anything from the marriage? If you put together a robust financial plan before, during, and after the divorce, you can avoid making careless mistakes. Call the office of Brian D. Perskin & Associates P.C. at 718-875-7584 today to schedule a free consultation and plan for your financial future following a divorce.