Emotions may cloud financial issues in divorce

Wisconsin couples who are facing the end of their marriages must also take a look at their financial matters. Before sitting down with an attorney or another professional, they should look at their own income, debt and assets as well as that of their spouse. They should also look at their joint marital assets.

People may not realize how fully their financial situation might change after a divorce. In addition to paying child support and alimony, they may also have to take on a rent payment or factor in higher utilities. Property division might include splitting up a jointly owned business.

Dividing retirement accounts may be complicated because a lump-sum disbursement can trigger tax penalties. A financial or tax adviser might be useful in navigating some of these issues. It is also necessary to review documents and accounts that have a beneficiary designation such as life insurance. Because divorce can cause emotional turmoil, individuals who are divorcing do not always make the best decisions. Working with legal and financial professionals can be helpful in ensuring that they do not later regret the agreements they came to in a divorce settlement.

For example, people may wish to consult an attorney during their divorce even if the divorce is not acrimonious. Some decisions may have tax, legal or financial ramifications a spouse is unaware of. The situation can become particularly complex in higher-asset divorces. One spouse may attempt to conceal assets, or the process of determining what and where the assets are may be complicated. There might also be a dispute over what is considered joint marital property. For example, an inheritance may or may not be depending on factors such as whether the asset was commingled with other marital property. Furthermore, if the couple previously signed a prenuptial agreement, one might choose to challenge it in court.