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Protecting one's money during divorce

Many residents of Georgia are often forced into difficult financial positions when going through a divorce. The abrupt shift may be jarring to some, and so it might be beneficial to consider one's monetary needs both during the process and after it is completed. In order to mitigate potential issues in the future, joint liabilities should be discussed and settled prior to the finalization of a divorce. This can be accomplished by paying off each of those obligations or transferring them to one of the parties. In the same vein, any shared credit cards should be cancelled and mortgages refinanced when possible.

Assets should also be split accordingly. This may include items such as retirement assets which have the ability to be transferred tax-fee under certain circumstances. The transfer of all or a portion of a employer-sponsored retirement plan will need to be covered by a qualified domestic relations order to avoid adverse income tax treatment. While a majority of digital assets such as photos do not possess a notably high value, they might also be included in an amicable split to avoid any emotional distress.

One might also review past tax information to avoid any confusion or error. Noting past income and charity donations may yield the discovery of tax assets and provide for reductions on returns after the divorce. If an immediate cash flow is integral to an individual's survival, liquid accounts such as mutual funds can be sold quickly and easily.

Ensuring that a person's assets and finances are well-maintained after a divorce can be a frustrating process to navigate. A family law attorney can assist a client in the negotiation of a settlement agreement that will take cash flow needs and other considerations into account.

Source: Market Watch, "Divorce? The 6 worst money mistakes", Leslie Thompson, September 23, 2014

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