Financial Issues Concerning Divorce

Without question, assets and liabilities, child custody, and spousal maintenance are the most important issues in any divorce case. We will discuss these issues in detail in the following section.

Three Issues that Need to be Settled Before the Divorce is Granted


Issues pertaining to property, children, and maintenance are such that it is best to settle them before the divorce process is finalised. Yes, these issues can be complicated but procrastinating these issues is not going to make them any simpler. We will also discuss how partners can ensure that an amicable settlement is reached.

Issue of Spousal Maintenance and Ways to Reach an Amicable Agreement

You and your spouse will have to decide about how much maintenance money will be required after divorce. In most cases, it is the husband who provides the wife with a monthly maintenance after divorce. However, there are cases wherein the wife supports the husband if the husband is not financially well-off. It is important that you sit down with your partner and calmly discuss this issue. Even if you are bitter, an unfair monetary demand can only ruin your relations with your spouse further. Divorce mediators can be of huge help if bitterness associated with divorce is hampering your judgment process.

Issue of Division of Assets and Liabilities and Ways to Reach an Amicable Agreement

This is the issue that deserves utmost importance. As a couple, you may have bought marital assets together. These assets would need to be shared amongst you and your spouse during the divorce process. Monetary assets such as cash, investment plans, shares and bonds deserve special attention during this time.

Unfortunately, it is common for people to lie about their actual assets around this time so that they can get more than their fair share in the divorce financial settlement. Inasmuch as you would like to trust your spouse during this time, it is best to play safe and crosscheck all the financial details from reliable sources.

Looking at your spouse's bank statement may also be a good idea. If your spouse has more than one bank account, make sure that you have all the details of the same. Division of physical assets also deserves attention during the divorce process.

Physical assets such as property are governed by a different set of laws and you would need to make sure that you take proper decisions to ensure that you obtain maximum financial benefits. For example, if you have received any property from your spouse, it would need to be transferred to your name before or in the year of marital separation. Performing the transfer at a later date can result in capital gain taxes. Make sure that you are aware of all the legal issues with respect to acquisition and sale of property including sale of marital home.

While many people spend days and months thinking about division of assets, very few people actually think about division of debt. Little knowledge can be very dangerous in this situation. Do you know if your spouse has taken any loans in the near past? How much do you know about your spouse's credit card bills?

If you and your spouse have incurred any debt jointly, it needs to be divided at the time of divorce. Most common joint debt incurred by couples is mortgage debt. If you and your spouse have joint credit cards or car loans, you will need to consider these as well. You should make a list of all your joint loans in order to analyse your joint liabilities. It is important to be honest to each other during this time.

Issue of Child Custody and Ways to Reach an Amicable Agreement

Child custody issues can get very complicated at the time of divorce, especially if both the parents fight for the custody of the child. Rather than fighting for your child in the court, you and your spouse should sit down and think about practical living arrangements.

Many couples opt for joint custody, which is a favourable outcome for the child as well as the parents. In addition, many couples, instead of making the children shift from one house to another, ensure that the children stay in the same house while they take turns to stay with them. Make sure that you and your spouse work together on the visitation issues and child maintenance issues.

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