Divorces almost inevitably mean that both spouses are going to take some sort of financial hit.
After all, they will split their marital property fairly and equitably, which means that neither should walk away with most of the property while the other gets the lion’s share of the debt.
Each spouse will walk away with less wealth and less earning power and income than either had before their split and the property division.
Helpful ways to protect as much property as possible
However, a resident of the Leesburg area can take several steps which may reduce some of the financial fallout from a divorce.
The first is to make sure to speak with a legal professional and a financial professional like an account or financial planner should a divorce be on the horizon.
The reality is that everyone’s financial and personal circumstances are a little different, and getting advice tailored to one’s unique situation is important.
What may be a smart idea for one person could be terrible idea for the next person because their circumstances differ in a few key respects.
In general, though, a person is going to want to pay careful attention to his or her retirement accounts. While they are often marital property, they can be complicated to try to divide. Furthermore, a mis-step on a retirement pension or a 401(k) can lead to a significant and unnecessary tax penalty.
Some professionals may also need to take to account their stock options or other benefits that have monetary value. In all cases, a person will want to make sure she understands the tax consequences of any financial decision related to her divorce.
On a more general note, a common but costly mistake is forgetting to change beneficiary designations on 401(k)s, life insurance and the like.
It is important to change these since, otherwise, the funds will go to a person’s former spouse. On a related point, a person will need to divide carefully all joint property and make sure that his assets are solely in his name.
Not so helpful ways of protecting property
However, even if creating separate accounts and the like is a good idea per se, it is important that a person not hide his or her assets or spending.
The person must also be careful not to squander jointly held priority by, for example, giving a loan to a friend or transferring money to an account that one’s spouse knows nothing about.
While these sorts of tricks may work in the short run, in the long term, the spouse stands a good chance of getting caught. In such cases, Virginia courts can consider and punish such behavior.