Making the right financial choices during a divorce

When Florida couples get a divorce, there are a number of financial issues they need to keep in mind. If their divorce is finalized after the end of 2018, alimony will not be subject to taxes, but experts say it is likely both recipients and payers will have less money. However, they also caution that trying to rush a divorce agreement could also lead to costly mistakes.

One that couples should avoid is not taking taxes and other costs into account when dividing assets. If they are splitting a 401(k), they will need a qualified domestic relations order so that there will not be a penalty on the distribution. The distribution must be rolled into an IRA to avoid taxes. If couples are each taking certain assets, they should be sure that when assessing the value of them that they take taxes and other associated costs into account. For example, one account might be taxed on distribution while the other is not. People who want to keep the marital home should make sure they can afford it.

There may need to be changes in health care plans and estate planning documents. People may want to consider mediation or a collaborative divorce over litigation if they think these issues can be settled amicably.

It might also be possible to resolve child custody issues outside of the courtroom, such as through negotiations conducted with the help of the estranged spouses' separate attorneys. However, there are a number of issues that might arise that could mean a judge needs to get involved. For example, if one parent has to take out protection orders because of domestic abuse, that parent may want the other parent to only have supervised visitation rights or no visitation rights at all. Parental relocations and other major life changes after a custody agreement is in place might also require court intervention.

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