Residents of Massachusetts whose marriages are ending this month are not alone. Statistically, March is one of the peak times of year for formal divorce proceedings. Experts theorize this could have something to do with the stresses of the preceding holiday season, but regardless of the reason, the bottom line is that a significant number of individuals are currently facing all of the financial issues that accompany divorce, from determining how shared debts will affect their credit scores to figuring out property division.
Individuals are well advised to continue making all payments on any shared expenses or debts until the divorce is finalized. Regardless of who will eventually be responsible for the mortgage or credit card payments, it is generally considered to be in everyone’s best interests to have a history of on-time payments until the proceedings are concluded. This helps ensure each party’s credit score is not damaged in the divorce.
Another aspect to consider during the proceedings is how the divorce will impact any retirement savings. Something called a qualified domestic relations order (QDRO) may help with regard to the division of retirement accounts. There are further aspects to consider as well, such as whether to roll received payments into a retirement account to defer taxes, and how pension payouts and benefits may be affected; an experienced divorce attorney can offer insight and advice into these issues.
When it comes to dividing shared marital assets, individuals may wish to begin by gathering financial data from the last five years. While this task may feel daunting, even information such as old tax returns and shared investment statements may prove beneficial in helping to ensure that each individual receives a fair share of the assets. Massachusetts is considered an equitable distribution state, meaning that the courts require a fair, though not necessarily equal, division of assets during divorce. Property division can be a rather complex aspect of divorce, though, and the legal counsel of a knowledgeable family law attorney can prove invaluable during the proceedings.
Source: ajc.com, “Victim of ‘Divorce Season’? Protect Your Finances“, Kevin Voigt, March 29, 2017