A previous post on this blog talked about the possible tax consequences of a divorce. While it is very important for a couple to consider all the tax implications of a divorce, there are other important financial issues and implications a person needs to think about as well.
Many couples who are splitting have a number of debts, some in their own names and some owed jointly with one’s spouse. Creditors have no obligation to respect the parties’ divorce decree when collecting. From the creditor’s perspective, they may pursue whomever owes the debt, even taking steps like garnishing wages. Therefore, it is very important that each spouse makes sure that the debts are divided fairly, so that both sides are protected if the other spouse does not pay off the creditor as agreed.
Likewise, spouses need to think about what property they want to keep. While the reality is that, in most cases, a person will walk out of a divorce or separation with half the property they had while married, what property they keep can make a huge difference in their future income and overall financial health. For instance, spouses who owned multiple homes while married need to decide whether the homes can be profitable income producers or whether it would be better to sell them and divide the equity.
Divorce and separation raise a number of financial issues that Massachusetts residents need to consider carefully with the help of both a financial advisor and an experienced family law attorney.