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Montgomery Family Law Blog

Retirement can be affected by divorce

Retirement may seem so far away for those focusing on getting divorced right now. After all, navigating a divorce proceeding in Alabama requires a great deal of mental and emotional energy due to the many important decisions that must be made regarding the marital home or spousal support, for example. However, thinking about retirement is essential during divorce as well, as the decisions made during a marital split-up can have long-term implications for one's golden years.

Even if a divorce happens decades before a couple had planned to retire, it can still impact their retirement. In fact, a survey from the Insured Retirement Institute revealed that 24 percent of older individuals who are divorced reported being worse off during retirement as a result of getting divorced. Meanwhile, 23 percent said they expected to have to remain in the workforce longer due to ending their marriages.

Divorce and separation are 2 different processes

Getting divorced can be one of the most challenging experiences a person may have in life for both financial and emotional reasons. It can also be difficult from a legal standpoint due to the many steps involved. One area of confusion for some couples in Alabama is the difference between separation and divorce.

With separation, two married individuals essentially decide to stay apart for an extended period of time, rather than immediately ending the marriage. The benefit of a separation is that it gives a couple a break from the fighting and frustration they may have been experiencing while living under the same roof. During this break, they can think more clearly about their marriage and the future before making the decision to end the marriage for good.

Retirement plans can be split during divorce without tax issues

During the process of getting divorced in Alabama, a topic that is often not considered is taxes. After all, dealing with issues such as the division of assets or spousal support can naturally be complex without even addressing the tax aspects of them. Fortunately, couples who are splitting retirement account or pension funds during divorce do not have to worry about the tax consequences of doing this.

According to the Retirement Equity Act, courts can award an employee spouse's pension to the other nonemployee spouse without it resulting in a tax penalty. This is true whether just a part of the pension or the whole pension is being awarded to the nonemployee spouse. In fact, any retirement account may be divided during divorce without having tax consequences.

Financial documents, assets require attention during divorce

A couple's goal when they walk down the aisle in Alabama is not only to get married but also to stay married. Unfortunately, this is not always possible due to irreconcilable differences that may crop up. However, a few tips can help those going through divorce to protect themselves financially during this type of family law proceeding.

Knowing one's debts and assets is essential. For this reason, accessing CPAs, financial advisers and accounts as soon as possible is critical. The documents that may be helpful to copy include work-related documents, such as those for pensions, IRAs, 401(k)s, 1099s and W-2s. Other important documents to gather and copy include year-end financial statements, investment statements and personal bank statements.

What can you do if you find out you're not the father?

Raising a child is difficult enough, but not knowing if that child is yours is a serious concern to bare. Eventually, you may decide that you need a DNA test, even though you love your child. At that point, you'll either be proved to be the biological father or be told you aren't related to the child.

If you find out you aren't related and have been paying child support, you're in a difficult situation. Once you've taken on the role of a parent, it's not as easy as using a DNA test to prove you aren't and to stop paying support.

Financial and divorce process knowledge important during split-up

Getting divorced is never really easy even in the most amicable of split-ups. After all, in addition to trying to sort out their emotions, the spouses who are splitting up have to sort out their finances, too. A couple of tips may help with this process during a divorce proceeding in Alabama.

Becoming familiar with the household finances is critical when starting the divorce process. This includes knowing what properties are owned and how much is owed on these properties. Knowing what credit accounts exist and the couple's net worth is also essential, as is learning about existing insurance policies and what they cover. Much of this information can be placed on a spreadsheet for easy reference.

Property division may spark conflict during divorce

The process of getting divorced can be tricky because both spouses may have different ideas about how their assets should be split. In Alabama, the divorce courts follow the concept of equitable distribution. Based on this concept, marital property is split in an equitable -- or fair -- manner, whereas separate property is not subject to equitable division.

During a marriage, some assets may be partly separate, whereas others may be partly marital. For example, if the couple uses one spouse's separate property to purchase marital assets, the appreciation of this property in the course of the marriage may be a marital asset. Thus, the court might need to compute the quantity of the property's current value that is based on the couple's initial investment as well as how much is the result of appreciation. Keeping records of how much property was worth when it was acquired, along with the marriage date, is thus important.

Document gathering essential early on in divorce proceeding

The process of getting divorced in Alabama is complicated emotionally, legally and financially. Splitting property that has been accumulated during divorce is often a particularly contentious aspect of the dissolution of a marriage. However, it is possible for a couple going through divorce to pursue the division of property on their terms rather than on a judge's terms.

When working with an attorney, gathering essential financial and legal documents prior to meeting with the attorney can be immensely helpful. This will help to provide a detailed overview of all the assets and property that will most likely be sources of conflict during the divorce proceeding. The documents that need to be gathered fall under several categories.

Money in personal account may belong to spouse after divorce

Even when a couple strives to save their marriage, sometimes their efforts are simply not enough. In these situations, divorce is necessary. One of the biggest myths surrounding the dissolution of a marriage in Alabama and elsewhere is that the money in a spouse's own bank account will remain his or hers following the divorce.

Before getting divorced, some spouses decide to stash money in bank accounts bearing their names only. The goal of doing this is to avoid losing this money during the divorce. However, in reality, their future exes may be entitled to a portion of the funds in their accounts.

3 things to keep in mind in a child custody dispute

Divorce is immensely difficult for all parties involved, and sometimes divorcing spouses do and say things that they otherwise wouldn't.

Here are some important matters to keep in mind if you are a parent going through divorce.

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