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9 Things You Must Do Manage Your Finances After A Divorce

9 Things You Must Do

To Manage Your Finances

After A Divorce

Were you divorced in the recent or not-so-recent past?

Have you thought about how you want to change your financial affairs based on the fact you’re now a divorced person rather than a married individual?

Here is a list of MUST-DOS to manage your finances after a divorce:

  1. You should remove your spouse’s name from any financial accounts that belong to you only. This means if the court granted you any certain bank account as a result of the financial settlement, be sure your spouse no longer has access to it.
  2. Power of Attorney: during your marriage, had you given a power of attorney to your spouse to act on your behalf? If so, be sure to revoke it, unless you still trust your ex-spouse and wish for him or her to remain on the power of attorney.
  3. Update your living trust or your will. No living trust? You should consider creating one, especially with minor children involved. This is how you can control how your money will be used for your children should you meet an early demise, or become incapacitated to the extent you become unable to manage your financial affairs.

In a living trust, you can name a specific trustee to handle the finances of your children until they reach adulthood.

Most people want a say in how their estate will be spent on their children’s behalf. If you leave this open, your ex-spouse will be put in charge, and might make decisions contrary to your wishes.

  1. Also with minor children, consider naming a guardian who is not your ex-spouse (you can do this in a Pour-over Will, a document often attached to a living trust), especially if your ex-spouse has a substance abuse problem.

You should keep any proof you have that your ex isn’t a proper parent with either your attorney, or the person you are naming as guardian (preferably both), so they can successfully petition the court for the guardianship of your children should the need arise. If you can afford it, it wouldn’t be a bad idea to set aside some money for the litigation.

  1. Do you have a living will? Most people name their spouse as Health Care Agent in their living will. If that’s what you did, be sure to update your Health Care Agent. After all, this person would be the one called if you were in a serious accident, and couldn’t communicate with the world.
  2. Do you have How about your life insurance policy? Many people name their spouse as beneficiary. Be sure to update your list of beneficiary(ies) as soon as possible, unless the court ordered you to keep a life insurance policy with your ex as the beneficiary (yes, this happens). It’s usually seen in the case of an incapacitated ex-spouse receiving alimony from you, or if your ex demanded it for the care of your children after your demise.
  3. If you have a 401K or IRA, or any other type of retirement account, be sure to take care of any needed changes with the administrator of your retirement account. If your marriage lasted more than ten years, more than likely your attorney told you that you needed a QDRO after the divorce, and depending on what state you live in, it was perhaps executed along with the final decree of divorce.

But if that’s not the case, reach out to the company that administers your retirement account and provide them with your final decree of divorce, and with your new beneficiary.

  1. Contact the accountant or CPA who creates your tax returns. Let him or her know you are now divorced, and ask how it will affect you. If you do your own taxes, do an online search on the subject.
  2. Do you have assets of considerable value? Meet with your financial adviser to make any changes you wish to make now you’re the only one making decisions about your money.

We can help if you live in Nevada and haven’t filed your divorce yet. https://nevadadivorce.org.   

Things to Check Out When Filing a Divorce in Nevada

FILING A DIVORCE IN NEVADA?

If you’re not sure where to start, this would be a good place. We’ll cover everything you must think about before you file your divorce. If you leave anything out, you could end up with a mess on your hands later, perhaps even have to go to court multiple times to fix it. It’s not unusual for clients to come to us after they’ve filed their own divorce, had it granted, and then realize that they left out important stuff.

Even if you retain an attorney, take the time to read your divorce documents before you sign them! Double check that the documents cover all the points listed below to save yourself a headache later.

We realized some time back that many of our divorce clients weren’t reading their divorce documents before signing them! This shocked us, quite frankly, and it occurred so often that we created an additional internal document for our clients to sign that states they read their divorce documents before signing them and that they understand them. Filing a divorce is one of the most important things you’ll ever do in your life. Take the time to make certain it covers all you need covered so you’re protected.

RESIDENCY REQUIREMENT

Before you can even contemplate filing a divorce, check to be sure you’re eligible to file. In Nevada, you can file a divorce provided at least one the parties to the divorce has lived in Nevada for a minimum of six weeks before filing. Typically, a divorce is filed in the county where the resident party resides, though people sometimes file in other counties for the sake of convenience. However, if the plaintiff lives in another state and wants to file a divorce in Nevada against a Nevada resident, the divorce must be filed in the county where the Defendant resides. You may also file a divorce in Nevada if this is where you last resided with your spouse, or if this is where the cause of action for the divorce took place (meaning where your marriage broke up).

The actual Nevada statutes on the matter state the following:

Divorce from the bonds of matrimony may be obtained for the causes provided in NRS 125.010, by verified complaint to the district court of any county:

(a) In which the cause therefor accrued;
(b) In which the defendant resides or may be found;
(c) In which the plaintiff resides;
(d) In which the parties last cohabited; or
(e) If plaintiff resided 6 weeks in the State before suit was brought.

  1. Unless the cause of action accrued within the county while the plaintiff and defendant were actually domiciled therein, no court has jurisdiction to grant a divorce unless either the plaintiff or defendant has been a resident of the State for a period of not less than 6 weeks preceding the commencement of the action.

The court requires that an Affidavit of Resident Witness be filed as proof of the residency of either a Plaintiff, Defendant, or from one of the joint petitioners in a Joint Petition Divorce. If you live outside the State of Nevada, but your spouse lives here and you are filing a Complaint for Divorce (a one-signature divorce), an affidavit from someone who knows the Defendant well will have to be filed proving the residency of the Defendant.

 

GROUNDS FOR DIVORCE 

Nevada is a no-fault state. This means that either party may file a divorce due to incompatibly. The large majority of divorces filed in Nevada claim this reason as grounds because it makes things simpler.

Aside from incompatibility, there are two other grounds for divorce:

  • Insanity existing for two years before the filing of the divorce
  • living apart for one year before the filing of the divorce

Below is the exact Nevada revised statute regarding grounds for divorce in Nevada:

NRS 125.010 Causes for divorce. Divorce from the bonds of matrimony may be obtained for any of the following causes:

  1. Insanity existing for 2 years prior to the commencement of the action. Upon this cause of action, the court, before granting a divorce, shall require corroborative evidence of the insanity of the defendant at that time, and a decree granted on this ground shall not relieve the successful party from contributing to the support and maintenance of the defendant, and the court may require the plaintiff in such action to give bond therefor in an amount to be fixed by the court.
  2. When the husband and wife have lived separate and apart for 1 year without cohabitation the court may, in its discretion, grant an absolute decree of divorce at the suit of either party.
  3. Incompatibility.

 

PROPERTY DIVISION

Nevada is a community property state. This means that property acquired during the marriage by either party is community property. Same goes for debt.

The one difference is that if you inherited money during the marriage and never commingled it with the marital assets (such as depositing the funds into a shared account), that’s yours in its entirety.

If you used some of your inheritance for home improvements on a house you own with your spouse, you have commingled your inheritance with your community property. If you bought a house before your marriage, it’s yours alone unless you used community funds to maintain it or make mortgage payments on it. This means even using money you earned during the marriage because that income is considered community property. These are just two examples of what constitutes the commingling of funds. Ask your attorney if you’re not sure as this point can get sticky.

If a judge is the one to decide on your property division (if you agree on everything, you get to decide), all community property gets right down the middle unless there are circumstances as to why one spouse should get more than the other. There is no A or B choice here.

 

ALIMONY

In Nevada, there is no set rule on alimony. If you don’t agree to an amount either on your own, or through divorce mediation, the judge will decide based on many factors. Another thing that’s more complicated than making a simple A or B choice.

If alimony was granted in a divorce, the spouse paying it might be able to adjust it if he or she can show that his or her income adjusted by 20 percent or more.

The spouse receiving alimony remarries, the alimony obligation goes away, same if either party passes away.

Sections 8 and 9 of NRS 125.150 [Alimony and adjudication of property rights; award of attorney’s fee; subsequent modification by court] state this about alimony in Nevada:

  1. In addition to any other factors the court considers relevant in determining whether to award alimony and the amount of such an award, the court shall consider:

(a) The financial condition of each spouse;
(b) The nature and value of the respective property of each spouse;
(c) The contribution of each spouse to any property held by the spouses pursuant to NRS 123.030;
(d) The duration of the marriage;
(e) The income, earning capacity, age and health of each spouse;
(f) The standard of living during the marriage;
(g) The career before the marriage of the spouse who would receive the alimony;
(h) The existence of specialized education or training or the level of marketable skills attained by each spouse during the marriage;
(i) The contribution of either spouse as homemaker;
(j) The award of property granted by the court in the divorce, other than child support and alimony, to the spouse who would receive the alimony; and
(k) The physical and mental condition of each party as it relates to the financial condition, health and ability to work of that spouse.

  1. In granting a divorce, the court shall consider the need to grant alimony to a spouse for the purpose of obtaining training or education relating to a job, career or profession. In addition to any other factors the court considers relevant in determining whether such alimony should be granted, the court shall consider:

(a) Whether the spouse who would pay such alimony has obtained greater job skills or education during the marriage; and

(b) Whether the spouse who would receive such alimony provided financial support while the other spouse obtained job skills or education.

 

CHILD SUPPORT

Nevada has specific guidelines on child support, and the court adheres to this formula closely. Family court now requires a worksheet on how the parties determined child support amount be submitted. The judge will use the worksheet to verify that the parties adhered to the law. You can no longer simply state that each parent earns the same amount of money so that there is no child support to be paid when the parties share physical custody.

There are deviations from the formula, however:
(a) The cost of health insurance;
(b) The cost of child care;
(c) Any special educational needs of the child;
(d) The age of the child;
(e) The legal responsibility of the parents for the support of others;
(f) The value of services contributed by either parent;
(g) Any public assistance paid to support the child;
(h) Any expenses reasonably related to the mother’s pregnancy and confinement;
(i) The cost of transportation of the child to and from visitation if the custodial parent moved with the child from the jurisdiction of the court which ordered the support and the noncustodial parent remained;
(j) The amount of time the child spends with each parent;
(k) Any other necessary expenses for the benefit of the child.

Even if the parent liable for child support is unemployed, and even destitute, there is a minimum of $100 per month to be paid for each child.

 

CHILD CUSTODY

Family Court in Nevada favors joint physical custody if it deems it to be the best thing for the child. An exception would be one parent who lives close to the child’s school, and the other does not. Say both parents live in Las Vegas:  one in the far south around the Blue Diamond Road area, and the other in the far north of the city. Under this circumstance, a judge is likely to deem it best that a child live with the parent closest to the child’s school during school times, and with the other parent when school is out.

If one parent does not wish to live with his or her child, however, the court will grant full physical custody to the parent who wants it, and grant visitation to the other parent. Visitation is never forced.

Child support may be modified every three years; it can be lowered or increased depending on the circumstances. You can modify it before the three-year mark if you have had a change of circumstance making it impossible to pay the amount ordered in the decree of divorce.

Download the updated Child Support Guidelines here

If you cover all the above, you’ll be as protected as possible. As always, this isn’t specific legal advice to you. It’s a general information resource. There could be things specific to you that would add or take away from the points covered here. It’s always best to speak to an experienced divorce attorney.

Bye-bye Tax-deductible Alimony. Hello New Child Tax Credit

As you most likely already know, as of January 2019, alimony laws are changing drastically. One might say the law about it has been turned upside down.

Since the Revenue Act of 1942, alimony has been a tax deduction for the payer and income to the payee. No longer.

Now and for the foreseeable future, in any divorce granted after January 1, 2019, the alimony payer will shoulder the tax burden. And the payee will no longer pay taxes on that income. So, we expect to see happy payees and unhappy payers.

Our gov expects an increase in tax revenue of more than $6 billion from the move. They base that on the fact that typically, the higher earner alimony payer will be liable for more in tax payments, compared to collecting from the alimony payee who typically earns less.  

We unfortunately foresee alimony fights all over the country for high-income divorcing couples.

Those paying will try to pay as little as possible since they can no longer deduct it from their taxes. The payee might be the winner here since alimony is now tax-free income.

Experts say that the new tax law will most likely result in smaller alimony payments because payers will fight tooth and nail to pay as little as possible. But, in the end, it’s not up to the payee, but up to the judge presiding over the divorce. We’ll watch this issue with interest as it develops.

Furthermore, as if to add insult to injury, the legal fees paid to an attorney for securing alimony will no longer be tax deductible either.

DIVORCE ALREADY GRANTED?

Note that this new law does not affect alimony payments from divorces granted right up to December 31, 2018. Nothing will change for past divorces, only for divorces granted after January 1, 2019. That said, if you go back to court to have those alimony payments adjusted, you might well be subject to the new ruling.

 

WHAT ELSE IS CHANGING?

Besides the new alimony laws, the child tax credit is changing, and this could affect a divorce. It’s a concern. We can’t help wonder if fights over child custody and who gets the child credit will escalate given that the child tax credit is doubling! The 2017 tax reform bill is taking the child tax credit from $1000 to $2000 for every child under the age of 17.

Now, note that this is a credit, not a deduction. It means that, if say, you owe the gov $3000 in taxes for 2019 and you’re getting a credit of $2000 for your child of 17 years of age and under living in your household, you will write a check to Uncle Sam for $1000, not $3000.

And say you only owe the gov. $1500 in taxes, you’ll get your credit of $2000 against it. Yes, in this scenario, you’ll get a tax refund check for $500.

 

WHAT CAN YOU DO?

The best thing for you to do is to meet with your divorce attorney and CPA before you even go into the divorce negotiations.

Your divorce attorney can tell you what you’re most likely to be liable for, or receive, alimony-wise. She or he can also tell you how the child tax credit thing is likely to go.

If you’re sure you’ll be the payer of alimony, see if there is anyway you can offset alimony payments with property, or with say, a 401K or an IRA.

If you’re the payee, you might not want that because it means you’ll shoulder the tax burden on those accounts once retirement time comes around.

Of course, as we always say, figure out a way to compromise by entering a divorce mediation. This way, a solution or compromise might be found so that neither party suffers unduly.

 

5 Important Tips on How to Cope with a Divorce during the Holidays

 In our busy law office, clients who come to us during the holidays always seem a bit more distressed or upset than at other times of the year. We understand. They are going through one of the most difficult and stressful period of their lives at a time of year where everyone is expected to give more, love more, and forgive more. They feel confused and wonder how to find it within themselves to do all of that in the face of a divorce. If children are involved, this time period can become even more difficult and emotional to navigate.

No doubt you need a plan.

One thing to remember is that oftentimes, our emotional state is attached to familiar actions and surroundings. So, the very first thing to do is to change that.

 1.     If possible, venture out of your usual holiday surroundings. Visit out-of-state family, for instance. If this is not possible, see below.

 

2.     Start a new tradition, on your own or with your children if you have them, rather than continue with the ones you followed with your spouse. This will keep you focused on the positive and new rather than distressing over what’s been lost. For the kids, it could be fun and take their minds off what’s now different, namely, that for the first time in their lives, they are only with one parent at a time for this year’s holiday.

Tom had always wanted to take the kids ice-skating around the holidays, but his soon-to-be ex-wife didn’t like it at all, so they never went. He decided to make it a new holiday tradition to spend an afternoon at the ice-skating rink with the kids, and take them for hot chocolate afterward. It turned out to be a hit with them and gave everyone hope that the holidays could still be a happy time for them despite the divorce.

3.     If your children will be with your ex on the holiday itself, plan ahead of time to do something to help others. It’s a well-known fact that helping others lifts us in turn. Volunteering your time to a shelter on that day, for instance, would take your mind off your own suffering and warm your heart as you help others even less fortunate than you. Or find other single parents whose children will be with their other parent that day and celebrate together, doing something none of you usually does on that day.

Karin reached out to two other friends whose children were going to be with their other parent for the last day of Hanukkah. She arranged ahead of time for them to visit residents of a nursing home who didn’t get visitors or whose families lived out-of-state. They bought several low-cost gifts and wrapped them in bright paper and delivered them to these residents with good wishes, bringing tears of joy to the eyes of many of them. By the end of the visit, the women were thankful for the blessings they still had in their own lives. They followed this up with a special dinner at a restaurant none of them had ever visited. They vowed to do it again the next time their children were with their other parent for a holiday.

4.     Your children need love from both parents during this time. The goal is to keep them from thinking they’re being pulled between their parents and made to feel guilty for being with one or the other parent on any given day. If you’re still working out the holiday visitation schedule, be sure that the children have ample time with each parent and vary it up, from year to year if the children have to travel some distance between you and your ex-spouse.

If a certain holiday is very important to both you and your spouse, make it so that you both get the children for a portion of that, but be sure and do it in a way that is enjoyable to the children too. If you live far apart, it would most likely be best to agree to an alternate-year holiday visitation schedule.

Robert and Diane, who live 500 miles apart, agreed that their two children should spend all of the holidays with one another at least until their late teens, and made it so that the children spent the December holiday with Diane during odd years and with Robert during even years.  

Having to fly or take a bus to another state or country, or even city, to get from one parent to another on a holiday to meet a visitation schedule would most likely make your child dread that holiday rather than look forward to it.

5.     Lastly, but most importantly is, do NOT become a recluse. Even if you’d rather pull a double shift at work, or stick your hand in fire,  force yourself to go out and mingle with good friends or family (stay away from those who constantly bring up negative things about your ex, or ask them to stop). Your spirits will lift from your new activities! We are social creatures and even when feeling low, we derive happiness and comfort from being around others.

Have You Made Out Your Divorce Checklist?

We have lists for grocery shopping, for what to pack when we go on a trip, for camping, and for all sorts of other things. Yet, when it comes to some of the most important events of our lives, we often don’t make a list.  We read forums and check out social media to see what others in our situation have done.  But the thing is, none of those people know you. They don’t know your life, your situation.

The only way to do divorce right is for you to put the time into it. Sit down and make a divorce checklist so that you miss nothing when you sit down at the negotiation table, whether that be directly with your spouse, or during a professionally-led mediation.

As you’re creating your checklist, write down your preferred terms for everything. You’d be surprised what can fly out of your head when you’re having an important discussion with high stakes. It doesn’t mean you’ll get it, but at least you will feel you’ve done a good job covering all the angles.

WHAT SHOULD BE ON YOUR LIST

If you have children, you should add the following items to your divorce checklist:

  • Child custody: do you want to share physical custody with your spouse, or will one of you have primary custody and the other visitation?
  • Parenting Plan: on what days are the children with you? On what days with your spouse? How will the holidays be split?
  • Child support: In Nevada, this is pretty much set in stone except for certain allowed deviations. You can see those here: https://nevadadivorce.org/divorce-with-children/
  • Who will get the tax credit when you have a child? Sometimes a judge will order that one parent get the tax credit during even years, and the other parent gets it during odd years.
  • Religious upbringing: do the children currently attend services? Will that change after the divorce?
  • College education: who will pay for this, or will neither party pay. This isn’t mandatory in Nevada.

Whether or not you have children, you should cover these items too:

  • Alimony: are you entitled to it? Or do you have to pay it? There is nothing set in stone regarding alimony in Nevada. It basically comes down to any large discrepancy between the incomes of both parties, and the expenses each will have after the separation or divorce and how much each has contributed the marriage.
  • Property: In a divorce, property is more than just real estate. It covers anything of value owned by the parties. And remember, it doesn’t matter whose name it is in.

Property consists of:  

  • Any business you own together or separately
  • all bank accounts in both your names, or in your individual names. In a community property state, except for few exceptions such as in certain trusts, it makes no difference in whose name the accounts are held.
  • cars
  • furniture
  • art collection or any kind
  • any valuable collectibles (baseball cards, antiques, etc.)
  • jewelry bought during the marriage
  • vacation homes
  • timeshares
  • anything else of value that was bought during the marriage.
  • Note that some property purchased before the marriage such as a house for which no community funds were used to pay the mortgage or for maintenance is exempt from community property. It’s best to consult with your attorney on this one. Sometimes, this is like splitting hairs.
  • 401K accounts
  • Pensions (if this is to be split, it only occurs at the time of retirement. The terms are handled through a Qualified Domestic Relations Order, commonly referred to as a Q.D.R.O.
  • Any type of recreational vehicles: boats, RVs, four-wheelers, etc.
  • Health Insurance: typically, in a divorce, if health insurance has been provided through the employer of one of the parties, it will be lost to the spouse who is not employed by the company. That spouse can remain on the insurance for the same cost for 18 months under COBRA, https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra
  • Supplemental health insurance, such as dental and vision.
  • Life Insurance: do you wish to change your beneficiary? If it’s your spouse who has a policy and you are the current beneficiary and you wish for it to remain that way, it need to be in your decree of divorce
  • Do you have pets? Who will keep them, or will you share custody?

 

DEBTS

In a community property state, the same holds for debts as it does for property. It doesn’t matter in whose name the debt is listed, both spouses are responsible for repaying them.

  • auto loans
  • mortgage
  • utility bills for the marriage household
  • furniture loans
  • credit card debts
  • personal loans
  • any other debts that have been incurred during the marriage

 

WHAT TO BRING TO THE MEDIATION TABLE      

Whether you are discussing the terms of your divorce directly with your spouse or with a mediator, be sure to have the following on hand.

  • Bank statements
  • 401K statements
  • Pension statements
  • Mortgage statements
  • Credit card bills
  • Utility statements
  • All of your wishes regarding anything to do with your children (see the list above)
  • Any paperwork related to this Divorce Checklist.
  • Anything you feel is important even if not listed here.

This certainly will seem overwhelming to you, but it IS your future. Love yourself enough to do the work to protect yourself and your children if you have them.

7 Steps To Take for Future Financial Success When Divorcing in Nevada

If you’re reading this article, chances are high that you are looking into divorcing in Nevada. People too often end up with a messy financial life because of a divorce, but it doesn’t have to be that way. With some planning and patience, you can come out of it with your bank account in relatively decent shape.

There are many ways people and lawyers choose to go about the process of divorcing in Nevada. Based on our twenty-five years of experience representing clients in their Nevada divorce, however, the single most-important factor that can most affect your finances during a divorce is how you file a divorce. There are essentially three ways to file:divorcing in Nevada

  1. Employ the services of a mediator (this can be your divorce attorney) to mediate issues of property, debts, and children, then file a joint petition divorce.
  2. Agree on all the terms between yourselves and without a mediator, and file a joint petition divorce.
  3. You disagree on many of the terms and one of you files a one-signature divorce (complaint for divorce).

Number 1 is the best solution to divorce affordably and fairly. It’s a terrific option if you are uncertain about what is fair for your situation, or if you have been in a longer-term marriage and your property and debts are completely linked together (or you live in a community property state like Nevada).

Number 2 is the most economical and least acrimonious way to go about it. This is provided you feel that you can still trust your spouse with this, if not with other things, and you feel you are getting a fair settlement based on your own research. Some couples with few financial assets opt for this solution.

Divorce is never free, and you must share your current assets between the two of you, so your net worth will decrease, of course, but either of the above solutions will leave your wallet relatively intact.

Number 3 is the kind of divorce that can shatter your finances. If it goes as far as a divorce trial, it becomes the kind of divorce that makes some lawyers richer than their clients will ever be again. In a few cases, this type of divorce is necessary when there are millions or billions at stake, but otherwise, no. If your combined net worth is $500,000 and under, it is pure folly to engage in this type of divorce unless the other side is being highly unreasonable.

Going for Numbers 1 or 2 will leave a ton more money in your wallet. Because of this, mediation is our Step #1 to shelter your finances from as much damage as possible during and after a Nevada divorce.

Here are seven things we recommend you look at seriously when divorcing in Nevada.

  1. Select a divorce lawyer willing to mediate.

Mediated divorces are also known as collaborative divorces. If you are divorcing in Nevada, find a divorce attorney who is willing, first and foremost, to attempt to mediate your case with your spouse’s divorce lawyer.  It’s best to make sure that this attorney is a certified mediator. Divorce attorneys are offered continuing education classes in mediation. Some are also certified court arbitrators which gives them even more settlement experience.  Going to court instead of mediating is costly and acrimonious.

Of course, if you are dealing with a highly volatile and unreasonable Defendant (your spouse), you might end up having to go to court anyway, but it’s best to start with mediation. Things might be different in other states, but in Nevada, when one party files for a divorce and the other party responds by filing an Answer and Counterclaim, the court automatically sets a date for a Case Management Conference. Guess what that is? It’s essentially a mandatory mediation. The attorneys’ jobs at that point is to try and get their clients to settle rather than having to go to trial.

  1. Order your credit report.

Before you get into any sort of negotiations with your spouse, it’s best to check your, and your spouse’s, credit, so you know what obligations are on there.  Especially in a community property state like Nevada, spouses are responsible for debts incurred by either of them during the duration of the marriage. You want to know if your spouse took out a loan recently for instance. You don’t want to end up having a collection agency after you once the divorce is over because your spouse is not paying on the loan. If you were married at the time the loan was obtained, they can come after you for payment if your spouse defaults. Yes, we know how you feel about this. So, when divorcing in Nevada, avoid it by pulling your credit report.

  1. Make a list of your assets and liabilities.

Do you know what you own and how much you owe? Make a list right now

  • Download all your bank statements for the past year
  • Download your latest credit card statements
  • Download any brokerage accounts statements
  • Download your latest retirement account statements
  • Get the latest mortgage statements on all real estate you own, together or separately
  • Make a list of any valuable assets you have around the house, like jewelry, art collections, silver, high-worth china sets, classic cars, baseball card collections, anything of high value.
  1. Discuss tax consequences of any settlement with your tax accountant.

In some cases, you might be better off taking a lesser, or different, settlement if your income taxes will be affected negatively. For instance, sometimes a couple will agree on less child support (in cases where the paying party can pay more than the statutory requirement)  with the lesser amount balanced by more alimony. This might be a  smart move on the part of the one paying alimony, which is tax deductible, however, the one receiving the alimony will have to pay taxes on it, so it’s not very beneficial to him or her. Since child support is not taxed, but alimony is taxed as income, it’s not a wise move.

Be sure to discuss any proposed alimony scheme when you are divorcing in Nevada with your divorce lawyer and your accountant. If you decide to pay more alimony at the outset in lieu of property division and you deduct it from your income taxes, it could come back to bite you later. Agreeing to a larger alimony amount for the first few years after the divorce in lieu of property division is a big no-no with the IRS. They have become wise to that, and they might audit you if you reduce the amount of alimony you pay by several thousands after the first couple of years.

  1. Be sure to protect future child support and alimony

Though it’s not likely in most cases, the unexpected death of the spouse paying alimony and child support is possible. Therefore, it’s wise to have a life insurance policy in place with the spouse receiving these benefits as the beneficiary. It’s also a good idea to insist on a disability insurance policy in  the event that again, the payer of alimony and child support becomes unable to work.

  1. Update your estate documents and other accounts’ beneficiaries

When divorcing in Nevada, be sure to check to see who you have listed as “pay upon death” beneficiaries on all your bank accounts, as well as who you have listed as beneficiaries of your retirement accounts. If you have a will or a living trust, be sure to update those as well. If you don’t have a living trust, this is a really good time to set one up so that all of what is now your separate assets is distributed the way you want them to be.

  1. Do you have significant assets?

If so, it is best to retain a divorce lawyer and even an accountant to discuss these issues, rather than trying to go the Do It Yourself route. If you fear that your soon-to-be ex might prove unreasonable when dealing with you one-on-one about these issues when divorcing in Nevada, ask for divorce mediation. This allows you to discuss all pertinent information with qualified professionals who know how to keep tempers down during what can often be touchy subjects.

 

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