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Financial issues to consider during a divorce

On Behalf of | Oct 27, 2016 | Divorce

Financial matters can be one of the most contested issues of a divorce as well as a precipitating reason for one. North Carolina residents who are facing the end of a marriage may want to learn about some of the common ones.

A couple’s state of residence determines how their assets will be divided. North Carolina follows the principle of equitable distribution, which means that unless the couple can otherwise agree, the court will divide assets in a manner that it deems fair. This will not necessarily be equal, however.

Divorcing couples also have to come up with a resolution for their debts and joint financial agreements, such as for a mortgage, that were made during the marriage. The manner in which the debts are allocated will depend on the tone of the divorce. Both parties may decide to be responsible for an equal share of the debt, or one party may decide to pay a specific debt in order to own other types of assets that have to be divided.

Another factor to consider is taxes. After a divorce, an individual’s filing status will change and will affect the exemptions that can be claimed. If alimony is awarded, it is taxable income to the recipient and deductible by the payer. Child support payments can be a significant expense, but it is neither deductible nor taxable.

The end of a marriage can present some complicated legal issues, and people who are going through a bitter divorce sometimes let their anger and emotions get the best of them. In such a case, it may be better for a divorcing spouse to have a family law attorney conduct settlement negotiations with the other party.

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