Divorce is always an emotional process --from the time a couple first considers the notion until the divorce is finalized, and sometimes, beyond. However, divorce typically also has significant financial consequences. New York individuals who focus only on the emotional aspects may jeopardize their post-divorce financial stability.
The property division process is not to be rushed. Careful attention must be paid to each type of asset acquired in the divorce settlement. What may seem like an equal split could be anything but. One should take note of illiquid assets that might not be easy to dispose of and may cause cash flow issues.
Having accounting and tax professionals on one's support team can be a great help. They can help a client to distinguish between assets such as a brokerage account on which only dividends or capital gains will be taxed and a tax-deferred retirement account on which all withdrawals will be taxed. Post-divorce taxation must also be considered as it will affect a person's future income. For instance, receiving alimony is regarded as normal income, and, therefore, taxable, while paying alimony is tax deductible. In contrast, the receiver of child support will not be taxed on it, and the payer cannot write it off.
Building a support team is important, and even if a mediated divorce is the couple's choice, each party can benefit greatly from retaining the services of an experienced New York divorce attorney. Each party's lawyer can be present during mediation, and along with making sure that nothing is overlooked, he or she can provide valuable input. The lawyer can ensure that the final agreement complies with state and federal laws and is in the best interest of the client.
Source: TIME, "Keep a Divorce From Killing Your Finances", Jill Schlesinger, March 1, 2016