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Financial matters often overlooked during divorce negotiations

Missouri residents may be aware that divorce can be a difficult and challenging experience for the parties involved. The process often places a divorcing spouse under considerable emotional pressure, which may sometimes lead to important issues being overlooked. Failure to adequately assess future needs could lead to financial difficulties in the future, and certain items should be addressed during divorce settlement negotiations.

When negotiating over marital assets such as real estate, retirement accounts, stocks, bonds and mutual funds, cash flow requirements should be considered. Those requiring immediate cash may wish to prioritize assets that can be liquidated quickly and easily. Once an agreement has been reached regarding an asset, lenders should be contacted if the item was financed jointly. A divorce settlement does not change obligations under a loan agreement, and refinancing may be a wise step to safeguard credit ratings and the ability to borrow in the future.

The impact of taxes on matrimonial assets should also be taken into consideration. This is especially true of retirement accounts such as IRAs and 401k plans. Previous tax returns could also highlight carry-over deductions that may be relevant when negotiating a property settlement. The transfer of retirement accounts should also be handled with care, and a qualified domestic relations order will be required if it is an employer plan.

Mistakes made during negotiations over the division of matrimonial assets can cast a long shadow, and decisions should only be made after careful consideration. A family law attorney with experience in this area may understand the pressures involved, and the understandable desire to get through the process as quickly as possible. However, they are also likely to be aware of the possible ramifications of hasty decisions, and they could help their clients to avoid potential pitfalls by pointing out factors that could otherwise be overlooked.

Source: Forbes, “6 Money Matters Divorcing Spouses Often Overlook“, Leslie Thompson, August 19, 2014

Source: Forbes, “6 Money Matters Divorcing Spouses Often Overlook“, Leslie Thompson, August 19, 2014