The Financial Implications of Divorce

The Financial Implications of Divorce

Divorce is one of the top five most stressful life events for a reason. It turns your entire world upside-down—your family, your living situation, and, yes, your finances as well. In fact, financial stress is one of the top five causes of divorce, to begin with. This means a lot of divorcing couples were already dealing with financial issues before turning to the divorce court for relief.

Virginia Divides Marital Assets Equitably    

Virginia divides marital assets in a divorce based on what is equitable, not on what is “equal” (50/50). Courts in Virginia evaluate the things below in determining asset division when a couple divorces:   

• The earning potential, career training/education, and work history of each person
• The length of time the couple was married    
• Age and health of both people 
• The “standard of living” the couple lived with during the marriage 

Based on these factors, Virginia will decide what each person “deserves” in the dividing of the assets. This means a husband who single-handedly built a successful business enterprise may walk away with more than a wife who spent most of the marriage unemployed going from job to job, for example.

Financial Questions to Ask Before Divorce

These are some common financial implications brought to the surface during a dissolution of marriage proceeding:

• Have you realized that your post-separation spending habits may affect the settlement, alimony award, and support payments? 
• Were you considering buying a new home before the divorce is legally final?
• Have you thought about who will claim the “Head of Household” exemption on their income tax return?   

Protecting Your Assets in a Divorce 

How can you keep your finances in order and prepare financially for divorce? Rule #1 is to never hide your assets. For one thing, it’s a fraud, which is illegal and can get you into trouble with the authorities. Not only will hiding assets get you into legal trouble, but it can affect both your child custody and support arrangements. In other words, hiding assets will cost you more in the long run—like time with your kids. Instead, start gathering the following documentation to help protect yourself:

• Paperwork proving what belongs to you 
• Receipts for the property you personally paid for (or are in the process of paying for)
• Bank statements
• Retirement account statements
• Investment account statements
• Proof of any debts you have  

Do You Need a Marital Assets Lawyer?   

Some of the things an experienced marital asset division attorney can help you with include the following: 

• How to legally and fairly handle anything you acquired after your ex moved out.
• How to have one spouse’s name removed from the deeds to your cars, house, accounts, etc.
• How to divide up retirement accounts, which is a particularly tricky issue if you are under retirement age. You’ll need a lawyer to draw up something called a QDRO, so you don’t get penalized by the IRS.

We also highly recommend consulting a financial expert (CPA, financial planner) to further navigate the financial implications of a Virginia divorce.

Protect Yourself with a Fairfax Divorce Lawyer  

Have you ever heard the saying that if you think it’s expensive to hire an expert, wait until you hire an amateur? Curran Moher Weis can help you avoid stepping into that hole. Contact us for the best possible outcome for your finances during a divorce.