The financial aspects of a divorce can come as a surprise for people in Georgia who come to the decision to end their marriages. The process can shine a harsh light on marital finances, and many people may discover things of which they were previously unaware. In one study of 1,785 divorced or divorcing women, 46 percent of respondents said that they faced some type of financial shock during the process.
While most Georgia residents do not actively plan for divorce, it may not be a bad idea. Each year, 2 million divorces occur in the United States, and the divorce rate in the country is about 50 percent. Prior to filing for divorce, an individual should research local and state laws that govern the process. Furthermore, a person should determine whether getting divorced in truly in his or her best interests.
When couples in Georgia divorce, strong emotions and lifestyle upheaval can result in some important legal tasks being overlooked. While divorce settlements typically address every area of a couple's shared life, including finances, loose ends can sometimes complicate the lives of former spouses and family members long after a divorce is finalized.
When people in Georgia are going through a divorce, they can face unexpected hurdles, especially when they have significant financial assets to deal with. Many people expect that the financial changes that take place with divorce will happen quickly, but some can take a longer period of time. For example, if one spouse provides health insurance for the other, that policy will need to remain intact until the divorce is finalized. This is true even if the policy is maintained privately as may be the case when one spouse is in private practice as a doctor, dentist or lawyer.
The passage of the Tax Cut and Jobs Act will bring about a number of changes that may affect people in Georgia during their divorce. One of those changes is that alimony will no longer be taxed or tax-deductible. This means the alimony recipient may have a low reported income and benefit more from investment assets in the divorce than from keeping the home because he or she may qualify for a capital gains tax rate of 0%.
Given that approximately 1 out of every 10 people living in Georgia has experienced a divorce at some point in their lives, locals are no strangers to how deleterious the dissolution of a marriage can be, especially to their finances. In fact, people who have been divorced have a higher chance of running out of assets come retirement and have a lower net financial wealth when compared to those who have never filed for divorce.
Once the divorce process has begun, Georgia residents should check with their attorneys before taking certain financial and parental actions. Many restrictions and rules are set in place during a divorce, and violating these boundaries can result in legal trouble.
There are certain steps people in Georgia can take to make the process less difficult. People should think about their priorities and the difference in what they want and need as well as what they are willing to let go. This will help them in the decision-making processes ahead.
Georgia parents may be determined to end their marriage, but they may also want to protect their children from negative repercussions as a result. A divorce can have a significan impact on family finances, but parents may want to examine how college tuition bills can be handled for their children. Dealing with tuition and fees can be challenging for any parent, especially with the costs of a university education continuing to rise. However, financial planning can help parents to plan how their children's educational expenses will be covered after a divorce.
Unfortunately, many divorces are financially devastating. A person may lose as much as half of his or her assets and investments to a spouse, and the higher-earning partner may end up with child support or alimony expenses. Both individuals will be saddled with legal fees that can be extremely high if the divorce is litigated. The good news for Georgia residents is that it is possible to recover financially from divorce with the right plan and mindset to avoid costly mistakes.