“Marriage is about love; Divorce is about money.”
It is an often-used axiom. Taxes post-divorce are sometimes tricky. If you file as a single individual, you may be bumped into a higher tax bracket even though your income level is lower than if you filed jointly. It might not be fair but that’s the law; there isn’t any way around it. Intertwined retirement or investment plans can be complicated to sort out during a divorce.
Couples who have been married for a long time might have built up significant savings and have several retirement plans. If a thorough analysis is not done, you could easily overlook some of the details and values hidden in the retirement plans. Especially in a gray divorce, the divorcing couple often needs to craft a Qualified Domestic Relations Order (QDRO) to divide the assets that will create two separate accounts – one for which each spouse may own, contribute, and/or withdraw. A QDRO also protects the spouses from paying taxes when the assets are transferred from one person to the next or split. The QDRO often requires an attorney’s assistance to be crafted properly or the couple might incur unnecessary tax penalties.
Reach out to the Senior Divorce Attorneys at Brandon Legal Group for advice and assistance in any way that’s comfortable for you. You can reach us by phone, fill out a contact form, or chat.