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family law Archives

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.

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