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How to maintain your financial stability during divorce

| Sep 11, 2020 | Divorce |

People in Washington who are going through a divorce can take steps to avoid some common situations that may jeopardize their financial well-being. This involves managing both emotions and money.

Your finances

Before even heading into divorce, you may want to try to get a handle on your own financial situation. This means looking at marital finances and at how your life will change living on your own. You should keep in mind that it is much more costly to run two households compared to one, and your standard of living may drop. Putting together a budget can help you approach the process of property division realistically. In Washington, a community property state, division of marital property is supposed to be equal, but this still does not necessarily mean that you will divide everything 50/50.

Working with your spouse

A willingness to communicate with your spouse and to consider trying to negotiate instead of turning to litigation can make the divorce process less stressful and expensive. Using a method of alternative dispute resolution, such as mediation, might help resolve some conflicts. This may mean setting aside anger or other negative emotions. You might need to be prepared to compromise on some issues.

Divorce finances

You should be aware of the tax implications of any decisions you make around the divorce, including ways in which you may be taxed on assets that are transferred to you. You should also be careful with joint accounts and try to remove yourself from them if possible. While you can make an agreement with a spouse that the spouse will pay off a joint debt, you might have no legal recourse if the spouse does not follow through, and you could be held financially liable for it.

Through negotiation instead of litigation, you might be able to reach an agreement in which you keep some assets and your spouse keeps others of similar value instead of splitting each asset equally. An attorney may be able to help you prepare for negotiation or litigation.