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Couples must understand their finances before divorce

On Behalf of | Aug 15, 2019 | Divorce |

In Washington and across the United States, divorce can wreak havoc on a person’s finances. The end of a marriage involves strong emotions, and a dispute sometimes ensues. Designing a sound settlement agreement can help couples cope after they get divorced. Otherwise, they may learn that living as single individuals involves complexities with regard to money. Plus, divorced individuals risk losing the types of lifestyles they planned to enjoy during their retirement years.

Couples who divorce later in life may not fare well once they get divorced, especially if one spouse was the main breadwinner in the family. When two people decide to go down different paths, property division is often a major issue. A high-asset divorce may involve complex financial strategies before both parties are happy with the settlement. One person may require money, and the other spouse may need a place to live. Furthermore, taxes may become an issue, especially when trying to divide up the investments in qualified retirement accounts.

Additionally, a marriage lasting 10 or more years means that an ex-spouse is eligible to receive Social Security benefits based on the other spouse’s earnings. This strategy is useful for spouses who did not earn enough money to qualify for their own Social Security benefits. Debt is another issue to consider. A person does not want to share their ex-spouse’s debts after the divorce is finalized.

Living life as a single person has enough challenges without having to worry about paying back excessive amounts of money to creditors. Any debt-related issues that are not taken care of prior to a divorce need to appear within the pages of the settlement agreement. A couple going through a complicated divorce may want to consult with their own family law attorneys before they draft their marital settlement agreement.