Divorce Settlement Advice
Not everyone can handle divorce with same presence of mind. Most of the couples are so emotionally tormented by divorce that they can easily go wrong in their decisions related to divorce. Thus, the most important divorce settlement advice is to have a balanced approach towards issues related to divorce. Divorce is a touchy issue, where you have to suppress your emotions and use your mind and logic to win the case in your favour.
When we think of divorce, the first thought that strikes us is alimony. We feel that divorce is only about giving or receiving alimony. Definitely, alimony is the most important aspect of divorce. No wonder Paul McCartney of Beatles fame had to grant alimony of $48.7 million to his wife Heather Mills. However, limiting divorce settlements to alimony would be an example of short sightedness.
A good and sound advice related to divorce settlement will include much more than alimony and maintenance. Letís have a glimpse of some more important issues that form the basis of divorce settlement.
Important Aspects Of Divorce Settlement
For couples with children, the prime focus should be child custody. As parents, it is your most important duty to take care of your childís well being. Child custody is a complicated case if the issue is contested among the couple. There are specialized lawyers who deal with child custody.
If you think that your better half will not be a good parent for your children then you must try to win their custody. However, it is not advisable to fight for custody only to satisfy your ego. This will make the children bitter towards you and thus create a huge gap.
Child Support: Winning the custody of your children does not end the issue there. If you think that you can be the best parent just because you love and care for your children, you are wrong. For brining up the children and taking care of their financial needs you require money. Here comes the role of child support. Whether you have the child custody or not both the parents have to contribute for the cause of child support. So no divorce settlement can be devoid of child support.
Property and Asset Distribution: For people with less to share this is not a major issue, but for couples who have accumulated lot of property and asset post marriage this division becomes the important aspect of settlement.
The first challenge here is to shortlist the property and assets that will qualify for division. Of course, you canít go to court to fight for a refrigerator. After deciding on the property and assets that have to be divided you need a financial advisor to ensure a fair division.
Taxation Issues: There seems to be no connection between tax and divorce settlement. However, not many of us know that most of the aspects under divorce settlement are scrutinized under taxation laws. Even the capital gains of the assets you have received during settlement are subjected to tax.
Whether it is alimony, child support, receiving marital property, or division of retirement benefits, each aspect has a tax implication. For example, if you receive a huge alimony, you may be liable to pay huge tax also. On the other hand, the payer of the alimony gets a tax exemption. Similarly, properties with bigger capital gains have bigger tax liability. So divorce settlement does not end with mere division of property, or receiving huge alimony, it has other financial stakes as well.
Alimony: Although alimony is not the only factor involved while settling the divorce, it is of utmost importance for receiver as well as the giver. The amount of alimony received depends on various factors like your earning capacity, your requirements, and your future marital status. All the alimony received is subjected to tax. Only a good taxation lawyer can tell you ways to minimize tax liabilities.
Similarly the giver of alimony gets tax exemption. While settling on the amount of alimony you must try to maximize on your exemption with the advice of your tax advisor.
Paperwork: You cannot accomplish a desired divorce settlement until and unless you have access to all the necessary papers. So please try and get hold of all the important documents like tax files, bank statements, credit card summary, pension plan, your salary statement, retirement account, and other crucial records.
Court will consider only what is mentioned on papers, you have to substantiate every fact with the help of documents. Getting hold of necessary documents is not a matter of one day; it takes a gteat deal of time to collect the papers. So you have to be on your toes and accomplish the task by the time you enter the court.
Settling divorce is a complicated and action oriented procedure. A professional lawyer can help you know financial implications at every step. A good divorce settlement advice is not limited to alimony and child support but gives an in depth analysis of each and every implication in divorce.
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