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Tips for meeting the financial challenges of a divorce

On Behalf of | Aug 12, 2019 | Divorce |

A divorce can create new financial challenges, but there are steps Kentucky estranged couples can take to meet them. People should set aside money for divorce costs and create a short-term budget. This budget needs to acknowledge any new expenses, such as new auto insurance or a new place to live. After a few months, the budget can be revised for the longer term.

The next step is to look at shared assets. People who want the marital home should keep in mind that they may need to refinance it. They will also need enough liquidity to pay for taxes, repairs and other expenses.

Some assets, such as certain retirement accounts, will be taxed on distribution, so this should be accounted for when people are looking at the value of shared property. Parents may want to include a plan for how they will pay for their child’s college education. People who were lower earners during the marriage should be aware that if the marriage lasted 10 years or longer, they may be able draw on a former spouse’s Social Security benefits after retirement.

There might be some complicated financial issues to work through as part of the process of property division. For example, if one person owns a business, it may be necessary to get its value and then calculate what share the other spouse can claim. Spouses who decide to sell their home and split the proceeds may not be able to do so right away, and if this is the case, they may need to decide who will pay for upkeep.

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