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Approaching important money issues during divorce action

On Behalf of | Oct 28, 2016 | Divorce

Many Arizona couples struggle with money disagreements throughout their marriages. In fact, financial disputes are among the leading causes of divorce. While a wedding can be an expensive venture, divorce carries its own share of costs. A couple needs to address both assets and debts during divorce. However, taxes and child support are also major financial concerns for those going through the divorce process.

Asset division is one of the most prominent financial areas to be decided on during divorce. While this might not seem like a major concern for a couple with minimal assets, it is important to understand that retirement accounts, a family home, and even minor investments could come into play. One’s state of primary residence determines whether an equitable distribution or community property approach will be used. In either situation, however, the goal will be that both parties leave the marriage on a fair financial footing. Debt can be a frustrating element of property division because jointly signed loan documents or accounts could continue to have legal implications even if a marriage is dissolved.

Tax obligations can change as a couple splits. It is wise to evaluate one’s new tax bracket to ensure that changes are promptly made for withholding funds from paychecks. If children are a part of the picture, the divorce agreement should explain rights for claiming those children as dependents. Failing to think through these issues during divorce proceedings could lead to misunderstandings. In extreme cases, an individual could make errors on tax documents by incorrectly claiming their children. Child support also becomes a major issue for both parties during the finalization of a divorce.

While an individual might want to attempt to work things out in their marriage, it can also be helpful to take a preliminary inventory of existing assets and debts. When initiating divorce action, one may discuss any concerns about hidden assets or debts with a lawyer.