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Financial changes in divorce

On Behalf of | Oct 1, 2015 | Divorce

As many former Arizona couples have learned, divorce is a time of change. For some, it is an emotionally taxing time. For many others, it involves financial change. Understanding how the end of a marriage can often bring financial consequences can be important for people who are at the start of the divorce process.

One of the first chores is to determine how assets and debts are divided. The property division aspect of a divorce will apply to assets and debts that were acquired during the marriage. As a result, it is important to determine which items fall into that category and what properties can properly be classified as being separately owned.

While some couples are able to come to an agreement over property division, others cannot. Finding a fair approach to this problem may be complex, particularly when the marital property involves a home, retirement funds and joint accounts. An attorney may assist in helping a divorcing spouse work through this process.

Retirement funds are often the source of misunderstanding. This requires careful attention. Taxes are another issue that might require additional care. Alimony payments are included in the income of the recipient for tax purposes and are deductible by the payer. However, child support payments are neither income nor subject to deduction. Life insurance policies should be reviewed to ensure that a former spouse is no longer the beneficiary, unless the divorce settlement agreement specifies otherwise.

A person who is facing the end of a marriage may want to have the assistance of a family law attorney throughout the process. Legal counsel can help in negotiating a comprehensive settlement agreement that covers the applicable divorce legal issues and which can be approved by the court.