22 South Street
Suite 202
Hopkinton, MA 01748
(508) 435-1281

 

A House Divided

Tip: School of Thought. Researchers typically peg the divorce rate at around 50%, but for those with at least a bachelor's degree, the number falls to below 30%. 
The Washington Post, April 6, 2016

The latest research suggests that divorce rates in the U.S. have been falling in recent decades. Still, many people face the difficult crossroads that comes when their marriage ends.1

Getting a divorce is a painful, emotional process. Don’t be in such a hurry to reach a settlement that you make poor decisions that can have life-long consequences. If divorce is a possibility, here are a few financial ideas that may help you prepare.

The most important task you can do is getting your finances organized. Identify all your assets and make copies of important financial papers, such as deeds, tax returns, and investment records. When it comes to dividing up your assets, consider mediation as a low-cost alternative to litigation. Most states have equitable-distribution laws that require shared assets to be divided 50/50 anyway. When a divorce becomes contentious, attorney’s fees can accumulate.

Fast Fact: Expensive Split. The most costly celebrity divorce on record involved Rupert Murdoch, who paid his wife Anna $1.7 billion.
Yahoo Finance, March 10, 2015

From a financial perspective, divorce means taking all the income previously used to run one household and stretching it out over two residences, two utility bills, two grocery lists, etc. There are other hidden costs as well, such as counseling for you or your children. Divorces also may require incurring one-time fees, such as a security deposit on a rental property, moving costs, or increased child-care.

Finally, dividing assets may sound simple but it can be quite complex. The forced sale of a home or investment portfolio may have tax consequences. Potential tax liability also can make two seemingly equal assets have varying net values. Additionally, when pulling apart a portfolio, it makes sense to consider how each asset will suit the prospective recipient in terms of risk tolerance and liquidity.

Remember, the information in this article is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.

During a divorce, many factors are competing for attention. By understanding a few key concepts, you may be able to avoid making costly financial mistakes.

Marriage History for Americans

Only 40% of men and 37% of women are currently married to their first spouse. 

Chart Source: U.S. Census Bureau, March 2015. "Ever married" indicates those who have been married once or more times.

1. The Washington Post, April 6, 2016

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2017 FMG Suite.

Share |
 

Related Content

Coaches

Coaches

Coaches have helped you your whole life, in ways big and small. We’d like to be one of them.

Buying vs. Leasing a Car

Buying vs. Leasing a Car

Whatever your relationship with your car, it may eventually come time for a new one. Familiarize yourself with your options.

Managing Your Lifestyle

Managing Your Lifestyle

Using smart management to get more of what you want and free up assets to invest.