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Key Questions to Ask in Divorce

How do my state laws affect me? State laws will address how property is distributed, how debts are handled, how child custody and support will be addressed, and what the process involves. This site offers details on individual state laws on divorce.

What documents do I need? In assessing and negotiating how your assets should be divided and how your finances will change, you’ll need a variety of documents. They will include:

  • Tax returns and all their supporting paperwork.
  • Bank, retirement and investment account statements.
  • Copies of monthly bills for regular expenses, including mortgage, utility and auto and other loans. 
  • Details on tuition, child care and other expenses relating to your children.
  • Appraisals of valuables, such as artwork and jewelry.
  • Insurance policy information.

What is my new cost of living? Two residences for divorced spouses will likely cost more than the one home you used to share, and you may need new furniture or appliances and more. When you split, be aware that you will lose out on the economies of scale that a married couple enjoy. To help you get on your feet financially as soon as possible, draw up a new budget that takes into account your new income and expense picture.

What are the tax considerations? You may know that you have to address who will get various pieces of marital property, but did you know that decisions will also have to be made about who will claim the tax exemption for your dependents or head of household status on their tax return? If alimony and child support are involved, the tax implications will also have to be considered. In addition, remember that your own individual tax situation will change when you file as a single person with a new income level, and factor that change into your budgeting and other financial planning.

What about health insurance? Spouses can’t remain as dependents on an ex’s health care plan, but their children can. Spouses can pay for COBRA insurance (named for the Consolidated Omnibus Budget Reconciliation Act) on the ex’s plan for 36 months after the divorce, but then must find their own coverage.

What about retirement savings? A spouse can make a claim for up to half of their spouse’s retirement account, whether it is an employer retirement plan, such as a 401(k), or an individual account, such as a traditional or Roth IRA. In dividing up retirement account assets, be aware that funds that are not rolled over into another account could be taxable in the year they are taken and subject to a 10% withdrawal penalty. Because of the rules involved, be sure to consult a CPA or attorney for advice when splitting a retirement plan in divorce. In addition, remember to continue your retirement saving throughout your working career to ensure a secure retirement.

What are the rules on Social Security? If your marriage lasted at least 10 years, you may be able to claim Social Security benefits based on your ex-spouse’s work record as long as:

  • Your spouse is entitled to Social Security retirement or disability benefits.
  • You are 62 or older.
  • You’re not married.
  • Your own Social Security benefit is less than what you’d receive by taking benefits based on your spouse’s record.

In certain circumstances, you may be able to claim benefits based on your spouse’s record if he or she qualifies for benefits but has not retired. Depending on your birth year, you may be allowed to file for your spouse’s benefits while delaying filing for your own.

What steps will help me start fresh? Once your divorce is settled, change the names on the titles to any property you have received in the settlement, including a home, car and bank or investment account. You will likely also need to update your will and the beneficiaries for your life insurance and retirement or other accounts. It’s also important to review your credit report to ensure that your spouse’s debts from before or since the divorce are not included.