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PrintFor What It's Worth: Divorce
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You thought your love would last forever. But, like half of married couples in this country, you're headed for divorce court. On tonight's For What It's Worth, 7's Craig Stevens says this is the time to carefully consider all of your finances before making that divorce final.
WSVN -- It's supposed to be the happiest day of a couple's life. But when that marital bliss turns out to be a marital miss, divorce may be the only answer.
That was the case for Brian Weaver, the vice president of creative services at Perry Ellis International. When his 12-year marriage fell apart, he and his wife had to face some difficult decisions.
Brian Weaver: "I've got two beautiful kids, Austin and Lauren. Austin is 9, Lauren is 7, and they live with their mother in Grand Rapids, Michigan. I go up to visit them once a month and talk to them everyday on the phone."
Travel expenses were just the beginning of a costly process for Brian. 7 News' financial expert Ken Wurtenberg says divorce is both emotionally and financially draining.
Ken Wurtenberg: "Then there's the financial aspect of it also, which is the unraveling or undoing of all your marital assets that you've accumulated over your lifetime."
Since one spouse usually moves out of the house, the first step is to re-organize the family budget.
Ken Wurtenberg: "One spouse typically moves out, and the other stays in the household. The one moving out has to get a place to rent, to live, double the utility expense, double the rent expense."
The next step is a big one -- splitting up the marital assets, including checking and savings accounts, retirement accounts and property.
Ken Wurtenberg: "What do I own individually in my name, what does my spouse own individually in her name, and what do we own jointly together?"
Ken says it's not just what you own. It's also what you owe, like dividing up credit card debt and personal loans. There are also tax implications.
Brian had to liquidate his 401-K to be able to afford to buy another home for himself.
Ken Wurtenberg: "If you take money out of a retirement plan, for example, it's going to be taxable to you. There could be a penalty involved if it's not court-ordered."
And make sure you fully disclose all your assets before the divorce settlement is finalized.
Ken Wurtenberg: "It's up to the obligation of each individual to disclose these assets, because once you get a settlement, if there are hidden or undisclosed assets, it unravels the whole divorce agreement."
Brian says he was lucky, because he and his ex-wife were able to work out a financial settlement on their own. Now Brian is happily re-married and focusing on the joys of parenthood all over again.
Brian Weaver: "My wife and I have a beautiful new baby girl, about 4 weeks old. Her name is Alise, so there is life beyond divorce."
If you and your spouse can't come to an agreement on your own, you should consult a family law attorney to help you hammer out a financial settlement.
Also, don't forget to change the beneficiaries on your insurance policies, or all your money could wind up going to your ex-spouse.
FOR MORE INFORMATION:
Ken Wurtenberg, CPA
305-556-0171
kwcpa@acpas.com
www.acpas.com