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Keeping the financial future in mind during divorce mediation

On Behalf of | Feb 19, 2018 | Divorce Mediation, Firm News

Ending a marriage comes with numerous emotions. One of them often revolves around fear of how the financial future will look after the divorce. Fortunately, Lexington residents going through divorce mediation can keep this all important factor in mind as they negotiate a settlement.

What will the budget look like as a single person living here in Lexington? The answer to this question could affect the structure of a final divorce agreement. More than likely, income will go down and expenses will go up in the majority of cases. Making the most of a settlement requires prior planning to make it stretch as far as it can.

If a couple has retirement accounts to divide as part of the divorce, the appropriate steps need to be taken in order to avoid often-expensive tax liabilities. For instance, 401(k) retirement accounts require a qualified domestic relations order in order to ensure that neither party incurs any additional tax penalties for an early distribution. This order can be either included in a settlement agreement or as a separate order. It may also be a good idea to include instructions and deadlines for following through on any additional steps needed in order to divide the marital estate in accordance with the divorce settlement.

Budgeting and dividing retirement accounts are just two of the financial issues addressed during divorce mediation. Obviously, every asset that must be dealt with during the negotiation process requires the same attention to detail in order to ensure that the parties do not have adverse financial ramifications in the future. Making use of the legal resources in the Lexington area could help in that endeavor.

Source: Forbes, “A Checklist To Help You Manage Post-Divorce Finances“, Jeff Landers, Feb. 12, 2018