Marital assets are always a major concern in divorce. Who gets the house? The car? That ugly Dalmatian statue in the foyer that neither one of you could ever get rid of? When dividing property, it can be tempting to try to take everything you can carry, but that’s not the smart approach. There are several long-term financial implications of divorce that you should consider before staking your claim on the beachfront condo.
Divorce will affect your Social Security benefits. Spouses are allowed to collect their own Social Security benefits or an amount equal to one-half of their spouse’s, whichever is more. This means that if one spouse does not work, or works much less, that spouse would likely want the spousal benefit. However, you cannot receive spousal benefits unless you are married for at least 10 years. When divorcing, take into account your future Social Security needs when deciding on asset division.
Taxes ”“ no one likes to think about them, but divorce is going to change your taxes drastically. First, you will lose your Married Filing Joint status, which can increase your tax rate (sometimes dramatically). Plan for this. Second, you may lose the ability to claim children as dependents for the tax benefits. Figure out which parent is going to claim the children as dependents at divorce time, not tax time. All of this information can help lead to a more equitable division of assets.
Too often, spouses don’t think to make copies of important financial documents before splitting up. This is bad because these documents may end up in a pile of papers in the bottom of a box, tucked into a storage unit or attic, never again to see the light of day. If you don’t have copies of those documents and are not on speaking terms with your ex, you may face financial consequences in the future.
Your credit might take a dive after divorce, or maybe you don’t have any credit because you didn’t handle the family finances. Make plans to establish credit before your divorce (through a secured credit card or a loan) so you don’t find yourself scrambling with your finances post-divorce.
Our Denver divorce attorneys are well-equipped to assist you in determining the most equitable divorce settlement for you and your spouse.