Financial worries are valid concerns that can prevent New York couples who would otherwise benefit from a divorce from even beginning the filing process. People are often especially worried that they will end up making all of the wrong decisions, leaving themselves financially devastated. However, careful attention and helpful guidance is typically sufficient to ensure a stable outcome after divorce.
For instance, when couples divide up their property, certain assets can carry tax or future cost implications. With assets like investments or property, it is necessary to consider more than just the current value. Instead, future projected values of investments -- including their resale value -- can be a deciding factor in whether either party wants to retain ownership. If not, parties can elect to sell the asset and split the resulting compensation.
This type of foresight can be applied to more than just asset division. The divorce settlement may encompass alimony payments and may also address child support or make reference to an established custody agreement. Any alimony payments paid or received can be subjected to taxation, but certain standards do apply. For instance, electing to receive a lump sum alimony instead of monthly payments may prove troublesome when it comes time to list deductions at tax season.
A divorce might seem like it deals only with the here and now, but in reality, it is merely setting the stage for the future of both parties. Decisions made in the New York divorce settlement have the potential to affect the futures of the parties involved for years to come. Because of this, those who neglect to take future financial and tax implications into consideration might have a less favorable outcome than those who are diligent in evaluating the potential impact of various choices.
Source: Forbes, "The 5 Biggest Divorce Mistakes", Larry Light, July 16, 2015