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Expect the Unexpected

When it comes to the matter of divorce, it is always safe to expect the unexpected throughout the process. It is important to adopt this same mentality when it comes to the financial side of divorce as well. When most people envision the financial impact of divorce, they tend to picture the same handful of items:

  • Spousal Support

  • Division of Investment Accounts

  • Division of Other Assets (Home, Properties, Vehicles, etc.)

What often gets overlooked, however, are the more detailed topics pertaining to these broad categories. Here are a few examples of important items to consider when determining an appropriate settlement:

What are the timelines?

Often, a settlement will call for a home to be sold and the proceeds to be divided amongst the two parties. Additionally, the terms of the settlement may involve the liquidation of stock or transfer of accounts. A specific timeline must be set in place for these actions. The housing market or stock market can be unpredictable, and the value of these assets can change drastically in a relatively short period.

Does an inheritance count as joint assets?

Historically, inheritances are viewed as separate property and are usually not divided in a divorce. However, it isn’t always that simple. If an inheritance occurred during the marriage and was co-mingled into marital assets, there is a possibility that it would be considered joint property.

How do we account for premature death or disability?

If there are pre-existing disability or life insurance policies, those will naturally be included in the discovery documentation. However, it cannot be assumed that beneficiary information will not be changed in the future. Additionally, if the settlement terms call for the purchase of an additional policy, this should be completed before the divorce is finalized, to make sure that the other party is insurable. If there is a pension involved, it is very important to understand how the selected payment method will be impacted by premature death.

Does the retirement plan allow for a QDRO?

Some pension plans do not allow for QDROs, and there have been many instances where this has not been discovered until after the divorce is finalized. At that point, renegotiating a new settlement becomes a costly and time-consuming process.

These are just a few examples of questions that must be examined during divorce proceedings. Even in the most straightforward of negotiations, there is always an opportunity for an item to be overlooked.


Josh VanFleteren

If you have any questions regarding the matters listed above, or as any other financial issues that may occur throughout the divorce process, please feel free to contact me at .


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