Money and Divorce: 4 Financial Points to Ponder - The Houston Family Law Blog

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Money and Divorce: 4 Financial Points to Ponder

Going through a divorce can be draining. Not only can it drain you emotionally, but it can also be financially draining.

In a divorce, there will be many financial issues, as Chicago Parent recently explained. Some of these include support and maintenance. Others include tax issues. It's important to think about these things when negotiating a settlement agreement.

Here are some financial points to ponder when going through a divorce:

What is your current financial position? You need to be open and honest with yourself regarding where your finances stand. And you need to be open and honest with the court. It may be tempting to give roundabout figures when disclosing your finances, but if you aren't accurate, you could run the risk of forgoing your right to proper support. If you will be the custodial parent, you need to make sure that you can make ends meet. Factor in how much you currently have in the bank, and how much you will need in alimony and child support payments.

What do you own? Texas is a community property state, which means that anything you owned prior to marriage is your separate property. Anything you earned or acquired during your marriage will likely have to be shared with your spouse. This is an important issue that you need to take note of. Check deeds and ownership records to see where you stand.

Beware of tax issues. If you filed jointly, you don't want to be on the hook for any malfeasance by your spouse. If your spouse was a tax cheat, you could be on the line. It might be wise to have a tax consultant look over tax records and old tax returns just in case there's something you should be aware of.

You'll also want to work with your divorce attorney or a financial planner to make sure that you aren't subject to tax issues in light of your divorce settlement or alimony payments.

Update your estate plans. People do die in the middle of a divorce. You don't want your heirs to be left with a probate mess because you forgot to change your estate plan. Update your wills and trusts prior to entering divorce proceedings.

Divorce is messy but you can keep things a lot cleaner if you take charge of your finances.

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