Divorce can sometimes be a complex process, so much so that people may be tempted to rush through it. That strategy can have significant, negative financial consequences, however. Many people here in Maryland who choose to end their marriages may not be aware of the impact of different financial choices, some which can have an immediate effect and others that may be more long-term. Luckily, there are several suggestions to follow to ensure the best possible financial picture once the divorce is finalized.
Immediate financial effects
Some people pursuing a divorce may be used to making a budget. If their spouse was always the individual who handled the money, it is important they take that duty over for themselves to understand how to cover their expenses and maximize their income. This goes hand-in-hand with considering how dividing assets may impact one’s taxes. Spousal support, retirement assets, and even taking over the family home all carry tax implications.
Future financial effects
There are financial issues that can pop up years after finalizing a divorce that ideally should be addressed much earlier. One way to avoid some of them is by taking time to consider one’s long-term financial goals, which can give a person a “roadmap” for his or her financial life. These individuals may not be aware that they may be able to file for Social Security benefits based on the income of their ex-spouse, which may be helpful to their future plans. Divorce is also the perfect opportunity to look over one’s financial accounts and to name new beneficiaries, if necessary.
Ultimately, it is vital that anyone in Maryland getting a divorce consider what is best for their personal financial situation. For those who are unsure, a family law attorney can assist with these answers, giving people ideas of what they want for their financial future. It may be the smartest money move they make in the entire process.