If you are getting a divorce, you likely have a lot on your mind. It can be hard to focus on practical matters considering the emotional worlwind you are probably experiencing. But, if you take some time to focus on a few common financial matters that go overlooked in some divorces, you can set yourself up for a greater degree of success and happiness after your divorce is concluded.
Deal with joint liabilities appropriately. Outstanding marital loans should either be paid in full or transferred completely to the spouse who is taking responsibility for them. Remember, while your divorce settlement agreement will be binding on you and your former spouse, it is not binding on lenders, who can still go after either spouse on joint loans should payments cease.
Pay attention to taxes. This not only means taking into account the tax value of assets — for instance, an investment property that has increased substantially in value since it was acquired is in reality worth far less than its value in cash because when it is sold capital gains taxes will be owed — it means taking into account tax assets. Tax assets include charitable contribution and capital loss carry-forwards that can reduce future tax liability. Tax assets should be considered asset equivalent to any other marital property.
Finally, do not misjudge your cash flow needs. Money and liquid accounts that are easily convertible into cash can help with the many immediate expenses that can stem from a divorce, such as moving expenses or legal fees. While a house may seem like an attractive asset in negotiation, it is not easily converted into cash and has a substantial upkeep cost; you want to ensure that you are not going to leave yourself short when it comes to cash flow.