Financial Planning For Divorce

People who are expecting to retire engage in financial planning for retirement. People who want to maximize the value of their estate in the event of their death engage in estate planning. People who want to pay the least amount of taxes possible engage in tax planning. Unfortunately, there are also times when a person realizes that a marriage is coming to an end. In some cases, the financial outcome of a divorce can be shaped ahead of time through careful divorce planning. Biviano Law Firm in Warren, Ohio, advises people who want to act now to shape the financial outcome of their future divorce.

Division Of Marital Property

A divorce or dissolution involves an identification and then a division of the marital estate. The marital estate, as a general rule, includes all assets that were accumulated during the marriage. Assets that were owned by the parties prior to the marriage are considered nonmarital or "separate property." These assets are generally awarded to the party who brought the asset into the marriage, provided that party can "trace" the existence of the asset back to its original source. Asset tracing can best be accomplished by the use of financial records, forensic accounting and document production.

Documentation And Assets

Financial records, original documents such as promissory notes and deeds, telephone records, medical records, bank records and tax records contain very important information in a divorce case. Although during the pendency of a divorce case it is sometimes possible to obtain copies of these records from the original source, this can be costly and time consuming. Depending on the age of the records sought, it may not even be possible to obtain these documents from banks, financial institutions or other original sources because some of these records are only required to be maintained for a certain number of years by the financial institution. It is therefore very important for someone who is in a potential divorce situation to copy and safeguard these records for use by the attorney in the divorce. Depending on the nature of the case, it may be impossible to obtain a fair property settlement or do a separate property tracing without certain financial records.

Inheritance And Gifts

Expected inheritances, trusts or gifts from a relative or other sources should also be carefully analyzed if one of the parties are considering filing for divorce. If the funds are transferred to both the husband and the wife instead of just one of the parties, all of the funds may be included in the marital estate, subject to equal or equitable division. If the funds are inherited by only one party or gifted strictly to one party, these assets may be considered the separate property of the person who received the inheritance or gift, and not subject to division with their spouse in the divorce. With proper divorce planning, the assets can be appropriately identified and transferred to clearly indicate the intent of the testator or donor, so that the assets are not included in the marital estate.

Other Financial Considerations

Decisions such as whether to buy or lease a motor vehicle or how much to invest in a 401(k), plan IRA or creation of trusts can also have important ramifications in a divorce situation. College financial planning for minor children and management of debt must also be considered in light of a possible future divorce if a divorce is likely. Every case is different, but sometimes financial decisions — such as refinancing with a home equity loan or the filing of a personal bankruptcy — can have serious ramifications if one of the parties later files for divorce.

Contact Us

For these financial and other reasons, advice from an experienced divorce attorney should be obtained well in advance of the actual filing of the Complaint for Divorce. For effective legal advice regarding the financial planning and filing of a divorce, call a lawyer at 330-392-5000 or contact us online.