Not all marriages will end happily ever after. That's the sad truth about the world today. People fall out of love with each other. They fall in love with others. They have arguments that seem to never end. Money problems get in the way of the relationship. Ideas of life together change. All of these are reasons that a marriage can end in divorce. But, do you know the signs of an impending 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.
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.
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.
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.
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.
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.
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.