The financial aspect of a divorce is often one of the most stressful parts of dissolving a marriage. Unfortunately, dealing with the splitting of marital assets and property can be so overwhelming that people end up making decisions that may impact them negatively in the long run. A few tips can help people to be proactive about their finances when going through a divorce in Michigan.
First, it is wise to approach the division of assets with one’s retirement in mind. It generally is a good idea to roll over all funds that are portioned out of tax-deferred accounts into other qualifying retirement accounts in order to avoid stiff withdrawal penalties and steep taxes. It may also be a good idea to change a retirement account beneficiary to another family member if one’s spouse was previously listed as the beneficiary.
Consider Tax Breaks
It is also a wise idea to become acquainted with tax rules in light of the divorce. A person may or may not qualify for certain tax breaks, depending on whether he or she could keep particular assets, such as an investment account or the family home. In addition, only one of the spouses is able to claim credits related to the children following a divorce.
An applied knowledge of the law in Michigan may help people to make informed decisions regarding how they approach the distribution of property and assets during a divorce. It is best if both divorcing parties can try to work out such issues on their own through mediation or negotiation. If this is not possible, however, a judge will have to get involved and ultimately make decisions related to these issues for them.
Source: dallasnews.com, “5 steps to keep a divorce from being needlessly expensive“, Jan. 23, 2015