On behalf of Kathryn Wayne-Spindler & Associates, PC posted in Property Division on Friday, September 12, 2014.
When people are preparing for divorce in Michigan, their minds are often consumed with major issues such as asset and property division. A couple might have disputes about who should keep the family home, for example. However, in addition to focusing on property division, a few other areas are important to remember during the divorce process as well.
First, an often overlooked aspect of divorce is the need to budget for it. Liquid funds may be needed to pay for separate living arrangements and daily expenses. In fact, it’s wise to have a minimum of three months’ worth of living expenses saved up. It’s worth noting that drawing money from one’s individual retirement account can result in having to pay a penalty as well as income taxes.
Prepare for Divorce with Sensible Budget
Budgeting is yet another critical part of getting ready for a divorce. It is paramount that an individual develops a new budget that reflects his or her new lifestyle without the soon-to-be ex. This is important because people often underestimate the amount of money they spend. When going through a divorce, it’s also wise to freeze jointly owned credit cards and take out a credit card just for oneself. This prevents the future ex-spouse from running up debt out of anger and having one’s own card can help a person to establish or build personal credit.
Getting divorced can understandably be an overwhelming experience in Michigan. It helps, however, if the two parties can see eye-to-eye on how financial matters such as property division or asset distribution are addressed. If this is impossible, a judge will have to step in and make these critical decisions for them.
Source: wsj.com, “How to Plan for a Divorce“, Veronica Dagher, Sept. 6, 2014