During a marriage, many Connecticut couples combine their assets and earning power. This often works well as long as the couples remain together. In the event of a divorce, all of those financial moves meant for two need to be separated.
It may be beneficial to separate and/or pay off some accounts and other finances prior to filing for divorce. For instance, if a couple has joint credit cards, it may help to either separate the accounts or pay them off ahead of time. The fewer debts that the parties have after the divorce, the better the chances of starting a new life on better financial footing.
On the other hand, some accounts should be separated during the divorce proceedings. For example, in a divorce the tax treatment of retirement accounts such as 401(k)s, pension plans and 403 (b)s is different. With a Qualified Domestic Relations Order, the accounts can be split without the usual tax ramifications as long as the funds are rolled over into another account. Each asset requires close scrutiny to determine when the best time to deal with it would be based on the parties current financial situation, and each party’s financial situation after the divorce.
Connecticut couples could attempt to make these decisions on their own. However, it would be easy to miss something important that could have a negative impact on future finances. Instead, it may be a good idea to consult with a family law attorney, and possibly other professionals, to ensure that the division of each asset and debt in the divorce results in more than just a fair and equitable division, but also in a division that does not unnecessarily harm one or both parties in the future.
Source: nerdwallet.com, “How to Untangle Your Finances in a Divorce“, Bev O’Shea, Hal M. Bundrick, CFP and Dayana Yochim, June 23, 2017