Abney at Law, P.C.
Call Today for a Free Consultation
301-850-4972

family law Archives

Estate planning decisions during a divorce

Divorce involves many difficult emotional and financial factors. One of the most important, and one that's often forgotten in Maryland and elsewhere, is estate planning. No matter what type of assets or end-of-life wishes are involved, making updates that reflect each person's priorities post-divorce is crucial. Even relatively young couples who are in good health and nowhere near retirement need to make changes to their plans because the future is not certain.

Divorce can cause changes to tax filings

Financial repercussions can be a major concern for Maryland spouses considering filing for divorce. From the division of assets to dealing with spousal support, there can be major impacts on each party's finances caused by the end of a marriage, and the stress around these issues can be equal to or even exceed that caused by the practical and emotional fallout of a split. One additional financial concern following divorce that is less frequently addressed but is quite important for future finances is the impact of divorce on annual tax filings.

Separating accounts and credit during divorce

For Maryland couples who are going through a divorce, one important step might be to close any joint accounts and open new individual ones. If spouses have accounts on which the other person is named as an authorized user, the user should be removed. These actions protect people from the other party being able to take all of the money from an account or for running up charges for which both are later responsible. It also gives people the opportunity to start to establish their own credit histories.

Family law in Maryland

Divorce can be a difficult process emotionally. Sometimes it is the only way to move forward in life. Not all Maryland divorces look exactly the same, but there are some procedural steps that they have in common.

Costly aspects of property division in divorce

Fees for legal or financial advice only scratch the surface of divorce costs. When a couple in Maryland possesses assets, taxes and housing expenses can cut deeply into the value of a divorce settlement. People over the age of 50 experience higher long-term costs because they often have substantial assets and limited time to rebuild a retirement nest egg.

How divorce affects taxes

Maryland couples who are getting a divorce should keep in mind that there will be a change in how they file their taxes as well. Marital status is determined by what a person's status was on the last day of the year, so at this point a person will either file as single or head of household depending on whether there are dependents. An annulment will require that amended returns be filed for the years of the marriage since an annulment means that the marriage never actually took place.

Handling IRAs and 401(k)s in a divorce settlement

On average, an individual pays $15,000 to complete the divorce process. However, this amount could be higher or lower depending on the circumstances of a given divorce. While some Maryland residents may consider using their retirement savings to help cover this expense, there may be better ways to do it. Taking a withdrawal from a 401(k) or IRA without a divorce decree may be more expensive in the long run.

Office Location

Abney at Law, P.C.
1 Church Street Suite 910
Rockville, MD 20850

Phone: 301-850-4972
Fax: 866-330-8861
Map & Directions

Email Us For A Response

Arrange A Free, Personal Meeting With Me

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy