Divorce mediation provides a private and often more efficient alternative to traditional litigation. Those who have chosen to mediate their divorce are wise to become familiar with the process. It is a good idea to understand all the financial implications of the divorce, including the division of assets and potential tax implications that come with the split.
Some specific financial considerations to keep in mind include:
- Know what you have. Get an organized outline of all the assets that will be eligible for division during the divorce. Real estate, savings, business interests and trusts can all qualify.
- Do not forget retirement assets. State law often considers these assets marital property. As such, they are generally divisible in divorce. In some cases, specific court documentation is required to split retirement assets. A divorce settlement agreement is not enough. Without these documents, called Qualified Domestic Relations Order (QDRO), the asset may remain with the owning spouse and the ex may not get a share as agreed to within the divorce settlement agreement.
- Plan for the children. If children are present, make sure the divorce agreement outlines their expenses. This can include childcare, the cost of private education and college as well as medical expenses and extracurriculars.
- Think of the future. You may want to keep a family home but take a moment to calculate future maintenance expenses before agreeing to give up other assets for this piece of real estate. It may make more sense to sell and split the proceeds and purchase a property that meets your future needs.
These are just a few factors to address during mediation. Additional considerations may be present and depend on the details of each, unique divorce.