Divorce and finances are two subjects that are often difficult for people. Divorces are often emotional, messy situations that are fraught with feelings of distrust and betrayal. Finances and taxes can be complex and difficult to understand, and mediators (as well as family law attorneys) often struggle with properly educating a couple on the financial complexities of their settlements. A failure to consider the spouses' particular financial situations, and the tax effects of the proposed settlement, during divorce negotiations can have a substantial negative effect on the parties' ability to come to an agreement that is fair and equitable.
The tax treatment and financial impact to the parties of potential transfers of assets such as the marital home, investments, and and retirement accounts must be considered. The Tax Code provides for certain benefits (non-recognition of tax) on transfers of property incident to a divorce, but these transfers must be planned, and the benefits can be lost if people proceed without the proper guidance. Furthermore, considerations regarding the tax basis of property transferred as part of a divorce must be considered, as well as how to protect survivor retirement plan benefits, or spousal and child support. Failure to address these issues can result in unexpected hardship and tax liability in the future, and dissatisfaction with the settlement in the long run.
Just Resolutions has mediated hundreds of cases involving child custody, parenting time, and child support. It is particularly important, when there are children involved, to create a safe place for divorcing couples to make decisions for their future. By doing so, we can help the parties work together to create solutions to address financial and emotional issues, and come to an agreement that maximizes the well-being of the entire family going forward.
Just Resolutions is here to help clients make the best possible decisions about how to resolve a stressful situation successfully. Most often, clients can arrive at a settlement they are satisfied with—and one that makes financial sense for both of them.