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4Getting a divorce can be one of the most difficult things you will have to do in your life. Not only will you have to deal with the emotional fallout from this major life change, but you also have a slew of financial and legal issues to reconcile. Some of these issues are things that you may already have on your radar, such as spousal support or how you will divide savings accounts. Other issues that need to be dealt with may not be as prominent, but important nonetheless. Have you thought about what you will do with your retirement accounts? Do you know if receiving or paying spousal support will be worth it come tax time? These are the questions that a financial advisor can help you with.

What Is the Role of a Financial Advisor?

Many people think that the only professional they need during a divorce is a lawyer. While it is important that you and your spouse each have your own attorneys, it does not hurt to hire a financial advisor too. A financial advisor’s job is to look at your financial situation and advise you of your options when it comes to finance-related decisions during your divorce. Much like an attorney gives you legal advice based on your situation, a financial advisor will give you your best financial options during your divorce.

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Illinois divorce attorney, Illinois family lawyer, IL child custody lawyerDivorce is a very emotional process. After all, you are leaving the person that you promised to spend your life with at one point. As much as divorce is an emotional process, it is also a complicated financial and legal process that can take quite a bit of time, sanity and even money to complete. One of the biggest stressors in marriage is money and it is not any different during a divorce. Depending on your circumstances and needs, your divorce could cost you anywhere from a couple of hundred dollars to upwards of $100,000. The cost of getting a divorce can differ for a number of reasons, some of which are in your control. Here are a few factors that can affect the cost of your Illinois divorce:

The Divorce Process You Choose

The type of divorce you decide to go with will greatly impact how much you end up paying for the process. In most cases, a litigated divorce will cost much more than other types of divorces. This is because a litigated divorce involves much more court time, attorney’s fees and court costs than other types of divorces. Other popular types of divorces, such as mediated or collaborative divorces, can cost less in the long run, depending on the level of cooperation between you and your spouse.

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Posted on in Divorce

divorce-financesOne of the most frequent causes of marital stress - and often divorce - is financial issues. Multiple studies confirm that high debt and the lack of communication about the debt is one of the major stresses in many marriages that end up in divorce.

Some of the more frequent financial issues that married couples face include:

  • Credit card debt: When one spouse continues to rack up credit card debt over the objections of the other spouse
  • Budget overextension: When one or both spouses are unable to stay within their financial means
  • Financial infidelity: When one spouse has secret bank accounts, credit cards, hidden purchases, or gambling issues
  • Impulsive major purchases: When one spouse makes a major purchase - such as a vehicle - without discussing with the other spouse
  • Inability to compromise: When spouses have different philosophies on how money should be spent, saved, etc.
Many people who cite debt as the cause of their divorce often find that their credit scores have suffered because of the marital debt. If you are in a situation where martial debt and financial issues are leading you to consider divorce, it is important to know the steps you should take to protect yourself before, during, and after the divorce. Multiple Streams of Debt

Common forms of  marital debt include:

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Illinois divorce attorney, Illinois family lawyer, Illinois child custody lawyer,With the new year fast approaching, 2019 is right around the corner. While this is exciting for some, couples who have just filed for divorce or are mid-divorce could see some not-so-nice changes with the new year. A law that was passed in December 2017 will come into effect beginning January 1, 2019, and will affect any couple who has not finalized their divorce by December 31, 2018. Act Will Change Tax Implications For Divorcing Couples The Tax Cuts and Jobs Act (TCJA) was passed in December of 2017 and made changes to the tax code that will affect about half of Americans in some way, shape or form when it goes into full effect at the beginning of the year. For divorcing couples, the TCJA will affect the tax implications of spousal support (also known as alimony). The act will change the existing 77-year-old law on who pays taxes on spousal support. Old Law vs. New Changes Any couple who finalizes their divorce before December 31, 2018, will adhere to the current rules on who pays taxes on spousal support. As of now, the person who is paying the spousal support can deduct the payments on their taxes. The person who receives the spousal support must pay taxes on the payments depending on their tax bracket. Under the new law, spouses who pay support payments will not be able to deduct the amount on their taxes and the spouse who receives the payments will not pay tax on them. Implications of the Change Couples who are currently going through a divorce have more pressure to finalize their divorces before this new law goes into effect. The American Academy of Matrimonial Lawyers estimates that divorces will change significantly in the way they are settled and that divorce cases will become more hostile than before. The organization has also stated that couples who currently have prenuptial agreements should reexamine the documents and update them based on the new law. Get in Touch with an Elmhurst, IL Spousal Support Attorney

It is no secret that a divorce can be a messy and complicated process. With the new law that will take full effect next year, your divorce could become even more complicated. At Weiss-Kunz & Oliver, LLC, you can have peace of mind knowing that we are here to help you throughout your divorce process and will help you make the best decisions about spousal support and its effect on your taxes. Our highly-skilled Lincolnwood, IL spousal support attorneys understand the importance of receiving support and that spousal support is something that you may depend on, especially right after your divorce. Contact our office today to schedule a consultation by calling 312-605-4041.

 

Sources:

https://www.efile.com/tax-deduction/income-deduction/divorced-tax/

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