Financial issues are often at the heart of divorce disputes. If you’re in the midst of ending your marriage or are seriously considering divorce, keep in mind that the average cost of divorce is around $7,500. However, there are other financial aspects to consider that could be very costly for you. If you’re a Mississippi resident, here are some important financial facts about divorce to keep in mind.
Not all assets are equal
In divorce, some assets have equal values. However, other assets, such as taxes and stocks, are not equal. It’s important to keep in mind that $1,000 in taxes is not the same as a stock with a $1,000 value. If you decide to sell your stock, your taxes will be affected. If you make any profit on your assets, the difference between the cost and sale price of the assets will be taxed. This will help determine how much money you’ll have to work with during the divorce process.
If you have a retirement account such as a 401K and your soon-to-be former spouse is entitled to a portion of the account, you should pay special attention to how your retirement funds will be divided in your divorce.
It’s best to have your lawyer draft a QDRO, or qualified domestic relations order. This document is separate from your divorce agreement and must be court-approved and sent to your retirement plan distributor. Your distributor has to review the document and approve it as well. If you have more than one retirement account, you’ll need a separate QDRO for each account. Taking this important financial step could help prevent financial strain in the future.