When a couple is going through a divorce, there are many things to remember. In addition to the relationship ending, assets and debts have to be divided. In Ohio, an equitable distribution state, mistakes are commonly made in the division regarding retirement accounts, tax considerations, jointly-held credit cards and other issues. An incomplete or vague agreement that does not encompass everything can pose difficulty for the parties afterwards.
Many people forget to consider such things as their own immediate needs for money, debts for which they are jointly listed with the ex-spouse, tax considerations, retirement accounts, and ownership rights to digital information the couple has accumulated during the marriage. Failing to address any one of these areas can cause problems later.
In addition to such things as considerations regarding child support and spousal support, individuals need to think first about how much money they need for daily living when determining their proposed property division plan. For any credit cards or debts on which both names appear, plans should be made to transfer them to one party or another or for them to be paid off as creditors are not bound to the property settlement when trying to collect on an obligation. Digital assets, such as photos stored on computers, need to be divided as they may hold emotional value to both parties.
Tax considerations are important. Retirement accounts will be divided by the court and employer-provided plans will require a qualified domestic relations order. It is a good idea for couples to review tax statements for the past five years to determine if any benefits such as loss carry-forwards are available.
Source: MarketWatch, “Divorce? The 6 worst money mistakes“, September 23, 2014
