Divorce can be a difficult and emotionally charged process, but it’s important for couples to also consider the financial implications of ending their marriage. Here are four considerations that couples should keep in mind when thinking about divorce and finances:

Property division: One of the key financial considerations in a divorce is how the couple’s assets and liabilities will be divided. This can include things like the family home, cars, bank accounts, and retirement accounts. It’s important for couples to understand their state’s laws on property division and to work with an attorney to ensure that their assets are divided fairly.

Alimony and child support: Another financial consideration in a divorce is alimony, which is also known as spousal support or maintenance. Alimony is money paid by one spouse to the other to help maintain their standard of living after the divorce. Child support is the financial support paid by a parent to help cover the expenses of the children. It’s important to understand how these payments are calculated and how long they will be required.

Tax implications: Divorce can have significant tax implications for both parties. For example, the sale of a home or other assets may result in capital gains taxes. Additionally, alimony payments are tax-deductible for the payer and taxable income for the recipient, so it is important to understand the tax implications of any agreements.

Budgeting and planning for the future: Divorce can have a significant impact on a couple’s finances, and it’s important for both parties to budget and plan for the future. This may include things like creating a budget, saving for retirement, or making changes to their investments. It’s also important to understand how the divorce will impact their credit score, as this can affect their ability to take out loans or credit in the future.

In summary, divorce can have a significant impact on a couple’s finances, so it’s important for them to consider property division, alimony and child support, tax implications, and budgeting and planning for the future when thinking about divorce. It’s also important to work with an attorney to ensure that your rights are protected and that your assets are divided fairly.

Divorce represents plenty of changes in your life and it can be hard to keep track of all those details.

Any major change in your life should prompt you to reconsider your current will and other estate planning documents. It is vital to update your will at these points in time because you need to verify that your estate plan is up to date overall. If you fail to update your will or other estate planning documents after a divorce, your ex-spouse may legally be entitled to certain assets inside your estate.

One of the first steps you should take after getting a divorce is to meet with your estate planning lawyer. Many people are relieved to receive their final divorce decree and want to move on with their life but meeting with an estate planning lawyer is critical for protecting your interests and ensuring that you have updated all of your beneficiary designation forms as well. For example, do not forget about retirement accounts or life insurance policies where that same spouse may also be listed as a beneficiary.

If you have other questions about what’s involved in the estate planning process and how you can approach it most effectively following any major change in your life, now is the perfect opportunity to consult with an experienced and dedicated estate planning lawyer. Bring copies of your current documents to your meeting with your estate planning attorney to discuss the next steps you need to take and any other updates that you might need to make.

Each person in a couple needs a team to help them navigate the tricky waters of divorce. The financial breakup and dissolution of your marriage has important implications for everything from retirement to the beneficiary designation forms you filed with your life insurance company.

And there’s no doubt that you are likely overwhelmed with all of the emotional, financial and physical aspects of parting ways to begin with so it can be hard to keep track of all of these details and ensure they are dealt with properly. Advising clients through major life changes is a core component of an estate planning attorney’s job.

A good rule to follow is to remain impartial and open when discussing estate planning matters with your attorney. Some of the most common things you might wish to bring up with your financial professionals and estate planning lawyer include:

• An inventory of all the assets that are owned individually or jointly by the couple.
• A listing of expenses including how those expenses might be adjusted for each spouse after the divorce.
• Information about any long term care life or disability policies currently in place.
• Reviews of any prenuptial agreement and how this could impact the division of assets in the divorce.

Your estate planning attorney can help you to look at the different documents that may need to be updated after you have gone through the divorce process. Knowing that you have another party to guide you through this difficult situation can help to make this complicated aspect of your life somewhat easier.

Need support from a NJ estate planning attorney? Divorce calls upon you to update your documents and ensure that everything is aligned with your new plans.

Plenty of people have rethought their life choices including the partners, their homes and even their careers as a result of the pandemic. If you are one of the people who is thinking about getting a divorce, you are not alone since this prolonged period of being at home could lead some people to make the decision that it’s time for a change.

If you’re ready for the next chapter in your life, you need to be prepared for several different things that you can and should not do. First of all, if you begin to file for divorce you cannot change beneficiary designations of retirement accounts and life insurance policies or retitle assets. 

The vast majority of states will block you from being allowed to transfer ownership of assets or changing your beneficiary designations until assets have been divided as part of the divorce court process. However, this doesn’t mean that you can’t update anything. You are eligible to update your trust and your will so that you can identify a new guardian for your children or name a new trustee or executor. 

You’ll also want to have a sit down conversation with your divorce attorney and potentially your estate planning attorney about some of the other issues that often come up around divorce. You might be interested in updating your materials as soon as possible to disinherit your spouse but there is the possibility that your spouse could still have a claim against your estate if you pass away during the divorce. 

Before the divorce is final, you’ll need to be clear about the ability for these documents to remain active and active in terms of allowing your spouse to inherit something. If you attempt to disinherit your spouse entirely while the divorce is still pending and you pass away, your spouse could actually sue your estate for the assets they would be entitled to under state law. For a conversation about these complicated issues, contact your dedicated estate planning attorney to discuss your options.        

Going through a divorce is difficult and it shakes up your family structure and even your day-to-day life in a big way. There are also so many legal issues that have to be handled to dissolve the marriage and allow you to move on with your own life, such as moving into a new place to live or updating your last name if you had previously taken the last name of your spouse.

Some marriages might end quietly, leaving you to think that you have handled all of the most important issues from a legal perspective and are able to move on successfully into your new life. However, you need to think carefully about the importance of planning and updating your estate following the divorce.

Without a spouse through whom you can anchor your estate plan, guardians, executors, trustees and agents under health care proxies and power of attorney must be reconsidered and formally updated in your documentation. These are not the only type of documents that need to be evaluated and carefully handled in the wake of a divorce. This is because separate documentation under beneficiary forms take priority outside of any wishes you make in your estate plan.

For example, beneficiary forms associated with your life insurance policy or retirement plans must be updated to reflect the dissolution of the marriage, otherwise these are legally binding and you most likely have your spouse listed as the recipient of these accounts. Make sure that you review your marriage dissolution documents to determine some of the steps you need to take. Provisions inside these agreements might call for the removal of spouses from one another’s estate planning documents and retirement accounts but it falls to you to make sure that this is carried through.