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Navigating the complexities of divorce and taxes

Tuesday, August 12th, 2014 and is filed under Divorce - Blog Category, Financial Planning Blogs

Divorce and TaxesWith the exception of child custody, the distribution of marital property is arguably the most important aspect of a divorce agreement. When considering division of assets, remember that what looks equitable on the surface may not be. One major reason is tax liability.

Typically, any transfer of marital property to one spouse that occurs as a result of a divorce settlement is not taxable at the time of transfer. However, any taxes due after the sale of assets or income earned from investments after the divorce will be paid solely by the spouse who was awarded the asset.

Let’s take a look at two areas of tax liability that come into play: income taxes and capital gains taxes. Read More

Get to know QDRO – Qualified Domestic Relations Order

Monday, August 4th, 2014 and is filed under Divorce - Blog Category, Financial Planning Blogs

What is a QDRO?It is very common in a marriage for one spouse to earn most, if not all, of the family’s income – especially if the couple has children. Generally, this means the spouse who earns more will be at a huge advantage when it comes to plans that will provide income in retirement. If the couple is facing divorce, their settlement will typically divide those pension plans, 401k’s, or IRAs. What many couples – and sadly, some divorce attorneys – don’t understand is the settlement agreement isn’t enough. You need a QDRO, or Qualified Domestic Relations Order. Read More