Steps you can take to safeguard your finances during and after a divorce:
• Consider other ways to divorce. Litigious divorces can cost tens of thousands of dollars in legal fees and last for years. Opt for alternative ways to reach an agreement, such as mediation or collaborative divorce.
• Keep taxes in mind. A stock portfolio split down the middle might not really be equal, if there are embedded losses or gains in the portfolio.
• Don’t be house poor. Many divorcing spouses want to keep their homes for emotional reasons and to provide stability for the kids. But maintaining a house also means mortgage, tax and upkeep expenses.
• Splitting up retirement plans? That involves tricky tax rules, so be sure you have the proper paperwork and talk to legal and tax advisers.
• Update wills, trusts and beneficiary designations on retirement plans and insurance, so your ex doesn’t end up inheriting an unintended windfall.
SOURCE: Wall Street Journal