Lack of financial planning can spell disaster in divorce

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For people facing divorce in Wisconsin and elsewhere in the United States, many questions abound regarding the best ways to navigate the situation from a financial standpoint. There are a number factors that play into how financial assets are divided during a divorce proceeding, including the amount of time spent married, the balance of income and whether any financial agreements were entered into jointly.

According to Forbes, a variety of financial mistakes can be made during a divorce that may have far-reaching implications for the future. For example, some people believe that receiving the deed for a shared home is of the utmost importance in a divorce only to find out later that the costs of upkeep are too much to bear. Likewise, some divorcing spouses choose to finance new or lavish purchases prior to or just after a divorce without thinking about paying off said purchases on a reduced income.

Taxes can also play a large role in the financial security of a divorcing couple. In many cases, taking funds out of an investment or retirement account can trigger tax penalties, and spousal support payments may also be taxable. As such, financial planners suggest developing a tax strategy prior to finalizing a divorce in order to avoid surprises at the last minute.

Divorce can be emotionally and mentally taxing, but financially, it can be a major setback for those who are not prepared or who do not receive equitable terms in the dissolution of a marriage. As a result, it is often recommended that people facing a divorce consult with a family law attorney. Such an attorney may be able to negotiate settlement terms to ensure that each spouse receives what he or she is entitled to during divorce proceedings. An attorney may also be able to provide post-decree modifications if circumstances change after a divorce motion is settled.