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Don’t forget about the other man in your divorce: Uncle Sam

by | Mar 10, 2017 | Elderly Divorce, Firm News |

If you’re a baby boomer considering divorce during your golden years, there are some financial concerns you will want to keep in mind. For example, what will happen to you and your spouse’s 401(k), IRAs and other retirement savings? Will you be able to enjoy the same quality of life post divorce as you did during your marriage?

You will want to get a handle on these questions and more before you decide to pull the trigger on your divorce proceedings. You will also want to think about what the “other man” has to say about your divorce. That “other man” is Uncle Sam. Yes, your divorce and the process of dividing your assets could have tax consequences that you will definitely want to keep in mind while deciding who gets what.

For example, let’s say during asset division proceedings, you’re considering your savings account, which currently has about $75,000 in it. You’re also considering your home, which you recently had appraised at about $200,000 on the current real estate market. It’s important to remember that — even though your home is worth $200,000 — it might be difficult and take time to actually liquidate it for that value. Furthermore, if you bought the home for $75,000 20 years ago, you’re going to get hit with big capital gains taxes once the home sells.

Taxes and the tax liabilities associated with specific assets must be considered when dividing possessions in your divorce. Your home might be worth $200,000 on paper, but after going through the time-consuming process of selling it, the tax bill will significantly reduce its actual value to you.

Baby boomers can get more insight into important issues that they could face in their divorce proceedings by speaking with a Florida divorce lawyer. A lawyer can help you make sure your rights are fully protected during asset division proceedings, and that you don’t get hit with unexpected tax consequences after your divorce settlement has been finalized.

Source: CNBC, “Memo to divorcing boomers: Watch your assets,” Jessica Dickler, accessed March 10, 2017