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Property division can give ex-spouses a financial start

When a married couple acquires substantial assets, a subsequent divorce could become complicated. In the midst of such an emotional process as divorce, the couple can easily lose focus on important divorce issues such as child support and custody, alimony and property division. However, as long as a person remains rational, rather than emotional, the distribution of assets can be equitable and reasonable.

A spouse should have copies of all financial documents prior to starting the divorce process. These documents include credit card statements, receipts for substantial purchases, pay stubs, insurance and annuity information, booklets of employee benefits, investment records and tax returns. A trained accounting specialist may also find hidden assets by reviewing credit applications.

A soon-to-be ex-spouse should also inventory all debts and categorize them as either individual or joint liabilities. Smaller joint debt may be assigned to one of the spouses, but larger debts, such as mortgages, need to be settled by property division. For instance, if the marital home that has a mortgage, the spouse who is awarded the home needs to refinance.

Additionally, if the paying spouse dies or becomes incapacitated, income from child support and alimony can be affected. Given that possibility, the recipient spouse should obtain insurance coverage from the paying spouse before the divorce goes through. In addition, special attention should be given to the splitting of retirement accounts; withdrawing pension money too soon usually results in penalties. Finally, if the spouses fail to name the beneficiary of the retirement plan, claiming the benefits can be complicated.

Source: The Marietta Daily Journal, "Financial Planning for Divorce," William G. Lako, Jr., Oct. 31, 2013

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