Though divorce rates have declined over the past decade, millions of people across the United States, including Michigan residents, file for divorce every year. A lot of people rush into divorce without considering the financial consequences, and they wind up being unprepared to cover expenses or taxes on assets once they are divided or sold. When beginning the separation process, it is a good idea to make a financial plan at the outset, sit down with a family law attorney and discuss the pros and cons to each course of action before taking it.
For instance, some estranged spouses will agree that rather than one person paying the other for their share of home equity, they will sell their martial home and divide the proceeds. What they may not account for is who will be paying the capital gains taxes on the sale and how it will be treated on their tax returns.
On the other hand, if the parties agree that one person can keep the marital house, that person may fail to take into account the expenses that he or she will have to pay without the benefit of a second salary. Covering a mortgage by oneself can be onerous, and the expenses associated with maintaining a house should be budgeted before parties decide whether one of them wants to keep the home after a divorce.
Another thing that some people forget to consider when getting a divorce is their estate plan. Following a separation, individuals can wind up going decades without even realizing that their ex-spouse is still the primary beneficiary of a will or a retirement plan. Unless someone wants to give everything to an ex, these estate planning documents will need to be changed. A family law attorney may help clients anticipate everything that needs to be revised or paid for when dividing assets.