Virtually no one wants to come out of a divorce with their financial state in shambles. However, the process of maintaining a solid financial foundation while also dealing with sometimes difficult decisions — such as child custody or asset division — may seem overwhelming. By keeping a few key factors in mind, couples in Oregon do not have to sacrifice their financial security during a divorce.
Alimony, for instance, is only one pixel of a much larger picture. While alimony payments are typically the more common route, there are some couples who find that a lump sum is a more appropriate way to handle alimony. Even though the lump sum may seem enticing to some, it may be less than ideal for the tax conscious — only alimony made in a series of payments is deductible during tax season, not payments made in one lump sum.
Taxes aren’t the only factors that require considerable foresight. If there are certain types of assets — such as investments or stock — the current value is typically considered rather than the big picture. The value of these types of assets can fluctuate as time goes on, possibly rising or falling in value rather than remaining perpetually stagnant. Although reviewing how the value has changed in the past can be a potential indication of future changes, the climate of the marketplace and future projections should also be taken into consideration.
Even child custody arrangements can have unintended financial impacts, including which parent gets to claim a child as a dependent during tax season and who pays who the child support. Ultimately, Oregon couples seeking a divorce should make sure that they consider the whole picture of the divorce settlement, which is made up of many different factors and influences. Making sure that their focus isn’t pinholed on one particular issue can help ensure a more fair, just and reasonable divorce settlement that leaves both parties in as stable of a financial state as possible.
Source: USA Today, “5 biggest divorce mistakes financially“, Wendy Spencer, March 7, 2015