When a person begins to contemplate the possibility of filing for divorce it can be a sad – and often scary – time in life. Coming to the realization that the bonded relationship a person was so happy to enter into is now coming to a decidedly undesired end can stir up quite a range of emotions and memories. Some will come to this point and decide to give their marriage another chance to recover. Others will decide that the ties just need to be severed so that each person can go their separate way. Once that hurdle is crossed, practical considerations come into play. And anyone who has been through a divorce probably knows that one of the biggest issues can be property division.
A recent article pointed out some of the ways in which the division of property can impact certain financial bedrocks that many people depend on, such as retirement accounts and insurance. One way or another a retirement account will most likely to be considered part of the marital property, and therefore subject to equitable division. But, after the divorce is over and these assets have been divided, retirement planning can be altered going forward for the newly-single person. Contribution amounts may need to be increased, and distribution amounts may be lower for a single person.
Insurance needs may change as well, including the possibility of finding new health insurance coverage or adding long-term care insurance. If a person isn’t going to have a spouse to help care for them in the elder years, steps need to be taken to ensure a person can live in dignity.
Asset division can be tough: there is no question about it. That is why it is usually best for a divorcing couple to come to an agreement on their own in order to avoid a protracted fight through litigation. However, this is not always possible. When a fight over property is brewing, knowing the options for the best strategy in court can make all the difference, perhaps even years down the line.
Source: The Seattle Times, “5 ways divorce could affect your finances,” Stuart Pfeifer, April 20, 2013