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Family law: Avoiding financial disaster during divorce

| Nov 10, 2020 | Divorce |

For whatever reasons some couples’ marriages ultimately come to an end. Over the last decade, the divorce rate in Wisconsin — as in the rest of the country — has continued to decline, but many people still end their marriages and do so without really considering what that will do to their finances, so they wind up unprepared or cash-strapped. During the beginning of the divorce process, it would be wise to create a financial plan and seek independent legal guidance with a family law attorney to discuss any action before it’s taken.

Some soon-to-be former spouses might decide to sell the marital home, rather than have one spouse buy out the share of the other. They agree to divide the equity, but they might not consider who will be on the line for paying capital gains taxes and how that will look on their tax returns. If both agree that one person should keep the home, it could be that the overall expenses could turn out to be too much for that person to handle alone. In any case, there is a lot to consider.

The expenses that go hand-in-hand with owning a home – never mind the mortgage — can be onerous. A budget should be formulated before either individual decides to keep the home. Selling the family home may come with heightened emotions, but it might be best for both parties.

Financially speaking, many couples fail to update their estate plans after a divorce. It is likely that neither person wants his or her former spouse to be the primary beneficiary of the will. Estate documents need to be changed as life changes. A Wisconsin family law attorney may be able to help a client to anticipate those things which need to be revised or what needs to be paid for upon the division of assets.