Divorces can be emotionally draining and complicated, and it’s not always easy to foresee potential sources of conflict down the road. That’s why couples must pay close attention to often overlooked items in their final divorce agreement. Making sure things such as tax liabilities, estate plans, digital assets, health insurance coverage, and even pet custody are all included can save a lot of headaches down the line.
Taking the time during your divorce proceedings to cover these five components can ensure that individual and couple’s rights, obligations, and expectations are fully addressed upfront.
5 Things Are in Your Divorce Settlement
Although divorce has statistically declined in 2020, 2.3 per 1000 Americans find themselves in the position of divorce every year. Having a settlement before and after a divorce protects individuals and couples from difficult conversations during a difficult and emotional time. Some considerations couples leave out of settlements include the following components.
- Complex Financial Estate Planning – Estate planning is essential to preparing for a divorce. Proper estate planning allows couples to retain a significant portion of their assets in marriage and divorce. Complex financial estate planning includes the following:
- Will Creation
- Life Insurance Policies
- Property Division
- Asset Division
- Selection of Beneficiaries
For couples with children from previous marriages, estate planning is essential to protect their family’s finances after they die or when considering critical medical decisions and end-of-life care.
- Tax Breaks and Health Insurance Considerations – It is easy to overlook taxation implications when going through a divorce. Legal representatives understanding the complexities of divorce and tax laws can significantly benefit your outcome. Unfortunately, this can severely impact finances. It is essential to consider many aspects when filing taxes – not just taxes from income. Joint accounts and assets should be divided between spouses, and alimony or child support should also be considered. Additionally, health insurance and tax credits for dependents must be considered when determining these individuals’ monthly payments.
- Using Power of Attorney – Power of attorney often needs to be remembered in the flurry of a divorce. Without it, critical decisions regarding you and your assets may no longer be in your hands if you become incapacitated. It’s best to take care of this issue before concluding the divorce, as leaving it until after could set off a chain reaction that can quickly spiral out of control. Make sure to appoint someone you trust to become your power of attorney before it’s too late.
- 401K and Retirement Accounts – Retirement accounts are an essential part of your financial picture that must be considered when navigating your divorce agreement. Working with a financial advisor or lawyer before agreeing to anything is necessary – they can help determine the most beneficial way to divide pensions and 401(k)s and ensure you’re not exposed to any unnecessary taxes or early withdrawal penalties.
- Excess Debt and Liability – In divorce, debt can also be a factor that should be addressed in a settlement to protect both partners. Both spouses need to consider how the debts will be divided in their divorce agreement and plan accordingly to ensure neither party is stuck with the entire bill. Seeking legal counsel from a family law attorney would help limit your liabilities throughout and after the process, so take this essential step for peace of mind.
Contact us today for legal representation.
Choosing to represent yourself during divorce proceedings can often lead to overlooking various important nuances in settlement agreements. At The Goodman Law Firm, we understand that these proceedings can be emotional and challenging, so our experienced attorneys work with clients compassionately while at the same time providing them with excellent advice and creating settlements that are tailored to their particular needs.
We research thoroughly and leverage our expertise in crafting settlement documents for maximum benefit for both parties involved. Contact us today if you want legal expertise to build your separation agreement.