A divorce settlement is one of the major steps to be considered on a tedious divorce process. Before coming up with a settlement to negotiate with your spouse, it is best to collaborate with your attorney and to ask your family for their sound opinion. It is definitely helpful to create a checklist before you settle your divorce.
Aside from fighting for the custody of your kids and the visitation rights, below are three financial applications that must be considered for coming up with the settlement:
1. Marital Home
Consider selling the home you’ve been living in for years. However, if you want to retain it, you need to factor in your financial capabilities, because you might need to buy your spouse’s share of equity and shoulder the mortgage payments. You also need to consider the possibility of keeping the home and losing it to foreclosure years later.
2. Cash Flow and Cost of Living Expenses
In dividing your assets between you and your spouse, you should consider your liquid asset and cash flow for post-divorce budget and future expenses. You have two options according to Legalzoom.com. You can convert your assets such as retirement accounts, stocks, and bonds into cash, but it usually have penalties and tax implications. Your second option is to give up your investments, to ask for liquid assets, and to check if you can apply for alimony.
3. Debt Distribution
As much as dividing the assets, distributing debt responsibility—including tax statements, legal bills, mortgages, vehicle loans, credit cards, and bank loans—between you and your spouse is just as important. Take note that dividing assets and debts differ from every state. In most cases, the court will divide and indicate which party is responsible for which bill. It is best to settle all debts before or during the divorce to make sure that assets are appropriately dealt with.
Divorce is never easy but proper analysis and well-thought projections can help you get a fair result. Your divorce attorney can guide you in coming up with the best settlement possible and in avoiding future financial hardship.