Over the last 4 weeks we have been posting tips and ideas for divorce financial settlements. This is part 4 of 4.
Attorneys are licensed to advise and practice the laws in the state in which they reside and hold licensure in.
Attorneys are not licensed to give financial investment or portfolio advice. Before one enters into financial negotiations or mediation for a financial divorce settlement it is wise to seek the advice of a CPA, who is a Certified Divorce Financial Analyst (CDFA) and/or a Tax Advisor regarding the particular details of their family situation and potential financial/tax implications of what they are considering for final settlement terms.
Budgeting for recommendations from a licensed financial professional is a far better investment in family funds to be prepared to make permanent financial decisions in a negotiation or mediation. A CPA, Tax Attorney prepared the following points of discussion included in our Transitions Divorce® Prep Workbook :
If one of the parties will have a higher income tax bracket than the other after the divorce, consider settling non-qualified accounts, home equity, and other non-qualified asset splits as “enhanced” alimony payments (from the high-income earner to the low-income earner) versus a lump sum settlement.
Increase/enhance the “alimony” amount to cover the alimony receiver’s tax burden and share equally in the “net” tax deduction savings of the higher income earner.
As an example, presume a couple had $200,000 in equity in a home to be shared equally (change the amount to fit your scenario). Instead of each party taking $100,000 (with no tax implications) consider:
More financial settlement advice and tips in Transitions Divorce® Prep Workbook
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Disclaimer: This is my personal blog. The opinions I express here do not necessarily represent those of my organization, Transitions Resource, LLC. The information I provide is on an as-is basis. I make no representations as to accuracy, completeness, suitability, or validity of any information on this blog and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its use.
The post Ideas for Divorce Financial Settlements-part 4 of 4 first appeared on Divorce Mediation Center.
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