High asset divorces aren’t always easy to work through because of the complex matters in these cases. For the people who are going through them, there are some very important financial considerations that come with this event. One of these is the presence of alimony.
Alimony, which is also known as spousal support, is a payment from one ex-spouse to the other after the marriage is over. These payments aren’t part of every divorce, but they might be included in marriages that have lasted a long time.
One thing that you must know when you are in the midst of a divorce is to keep up with the changing laws regarding alimony. This alone requires considerable time and effort. You don’t want to find out that you owe taxes on alimony payments when you didn’t plan for it.
On top of the taxation issue, you need to make sure that your budget can handle the payments. This means that you need to sit down and write out your income and expenses to find out if you need to make any adjustments to be able to make the payments.
You also need to think about the way that property division matters might impact your finances. Having property that is sucking money out of your budget, such as a house that is underwater, can be disastrous. This is why it is important to think about all of the terms of the divorce before you agree to anything. You have to think beyond the short term and look well into the future to find the right agreement for your needs.
Source: Entrepreneur, “5 Essential Tips for Financial Planning After Divorce,” Andrea Murad, accessed Jan. 11, 2018
