In Ohio and elsewhere in the country, people ignore personal finance issues in a divorce at their own peril. When they make any one of a number of mistakes, they may find themselves in a financial hole that they are stuck in for years. However, some planning and forethought can keep them out of these difficulties.
Many spouses believe that they must keep their marital home at all costs. However, the expenses can add up quickly. Even if there is one income plus child support, it may still not be enough money to make the mortgage and tax payments. Even if there is enough money, the spouse may end up house poor with not enough money for other expenses. Another error is to fail to account for taxes that are necessary because of the divorce agreement. If stocks or the home must be sold, there can be taxes due to the federal and state governments. However, some people do not realize this until they receive the bill.
Another error is to ignore the vital area of estate planning. A divorce will require that each person have their own estate plan. This includes changing beneficiaries on things such as insurance and retirement accounts. It will also mean new powers of attorney. Finally, it’s important to make a budget that reflects the new reality and stick to it at all times.
A family law attorney may help their client realize what they need to know about their new financial situation. Then, they may assist with negotiating a divorce agreement that helps their client best weather their new financial situation. The new post-divorce reality will mean new financial obligations, so the attorney might keep their client informed about what financial changes they could expect.