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How a divorcing Missouri spouse can avoid financial pitfalls

On average, a divorce can now cost around $15,000. While that is definitely a lot of money, divorcing St. Charles, Missouri, spouses can lose a lot more if their finances are not in order. These potential losses may wreak havoc on living expenses, savings and retirement plans of a divorcing spouse. However, by considering these steps, a spouse can still stand on firm financial ground after a split.

Even before a divorce is under way, it is best to be prepared. A spouse should gather financial documents and tax returns. Financial statements should go back at least one year. Include a credit report in order to check if there are any debts that need to be settled. At the same time, open a personal bank account and apply for an individual credit card.

Once the divorce starts, get specific help. Mediation can save a lot of money. However, for couples with many assets, assistance from a family law professional may be more appropriate. Also, consider a strategic approach during property division. This means giving up one's claim to the house if it means giving up investments with equal value, or vice versa. The same can be said in dividing retirement accounts. A divorcing spouse should determine what would be most beneficial for him or her for the long run.

Include children in the equation, as well. Be particular when going into a divorce settlement involving children. Beyond child support and education, there is also life insurance to consider.

Once a divorce is finalized, a divorced St. Charles spouse should not rest on his or her laurels. A divorced spouse should review taxes. Nuances like claiming children as dependents or alimony deductions can lead to substantial tax savings. A divorced spouse also should make a financial plan that is suited to one's income and household expenses. Updating one's estate plan is also a wise decision.

Source: CNN Money, "Don't let divorce wreck your finances," Karen Cheney, April 4, 2014

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