Negotiating a divorce settlement is never easy. For many Michigan residents, divorces involve property division, alimony decisions and child support agreements, all of which can be contentious topics. A few steps may help divorcing individuals to successfully navigate the divorce process and safeguard themselves against money problems following the divorce.
Dividing Debt in Divorce
Property division is not limited to real estate, but includes all of a couple’s assets. Marital assets often include retirement plans, homes, car and savings accounts. In addition to dividing assets, couples must also also be fair when dividing debt in divorce, which is another topic that requires serious consideration. Any financial decisions may have tax implications and affect both spouses’ futures. For this reason, both immediate and long-term financial consequences should be examined.
Alimony also has tax implications for both spouses. The payor will be able to deduct alimony payments on his or her taxes, while the payee will have to pay tax on the alimony received. Child support does not affect taxes, but parents will have to decide who will claim their child or children on their income taxes.
The process of divorce can be overwhelming and unpleasant if two parties cannot see eye to eye on how to handle the financial aspects of the divorce, including property division. If two people are able to come to an agreement at the negotiation table or use the services of a mediator, this boosts their chance of achieving a settlement that is mutually beneficial. Appropriate legal guidance in Michigan can help people to pursue the most favorable results as they strive to rebuild their financial lives in the midst of divorce.
Source: The Huffington Post, “Divorce and Money“, Terry Savage, March 18, 2015