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How to handle finances during and after divorce

On Behalf of | Feb 20, 2018 | Divorce

Divorcing Maryland couples have a number of financial matters to which they need to attend. For example, if person one is covered by his or her spouse’s health insurance plan, that individual should look for other coverage. It might be possible to get COBRA benefits while waiting for another plan to take effect.

The couple may have a home and a retirement account to divide. Splitting the home might mean selling it, or one person might need to refinance the house. People should understand the rules concerning dividing a retirement account before moving ahead with that step. For example, a 401(k) and some other types of retirement accounts will require a document known as a qualified domestic relations order to keep the couple from having to pay taxes and penalties.

Couples may need to change their estate plans. This could include removing one another as their beneficiary designations. Individuals should also close any joint accounts, and if either person does not have a credit record, he or she should begin establishing one. Each person should put together a budget that takes any child care and spousal support payments into account. People should make a specific plan as to when and how these payments will be made. After the divorce, both parties can consult financial planners, tax professionals and others for any additional assistance.

In most cases, a divorce will be less expensive and take less time if the couple can negotiate a solution for property division and child custody instead of going to court. People may want to talk to an attorney ahead of time about their financial goals and the issues on which they are and are not willing to compromise. Regarding child custody negotiations, although each parent may feel the children are best off with only one of them, it is important for children to spend time with both parents.

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