Overall, divorce is a complex issue, and if you are someone who is looking to get divorced in Los Angeles, you should begin financially preparing for your divorce immediately. There are various tax implications and other financial ramifications that often come with divorce, which is why it is critical that you do your research and speak with a knowledgeable Los Angeles divorce attorney who can help assess your financial situation and inform you of your options going forward. Here are some of the questions you may have:
How are retirement accounts affected by a divorce?
When spouses divorce, one of the least-considered, yet extremely important assets to consider are 401(k)s and other retirement accounts. You should first understand that in most cases, retirement accounts, including 401(k)s are included in the equitable distribution process, which means there is a very good chance that one spouse will be entitled to a portion of the other spouse’s retirement plan. That being said, when one spouse takes a certain amount of money out of his or her 401(k), there will be a 20% tax withholding, and if the holder of the 401(k) account is younger than 59 1/2 years old, there may also be a 10% penalty for an early withdrawal. For this reason, you should hire an attorney who can draft a Qualified Domestic Relations Order that will help limit the tax implications of withdrawing early.
What should I include in my financial plan for a divorce?
Aside from taking serious considerations when it comes to your retirement plan, you should also create a checklist containing various documentation regarding your financial situation to ensure that you will be able to afford to uphold your lifestyle on your own. If you plan on staying in your marital home, you should calculate the cost of monthly utility bills, taxes on your home, the cost of your mortgage, and more. You should also consider your yearly salary, how much you have in the bank, whether you are invested in stocks, and more. Financially preparing for a divorce can save you greatly in the long run, and if you are about to enter the divorce process, it is critical that you analyze each facet of your financial situation before proceeding. If you have any additional questions regarding the divorce process, please do not hesitate to speak with our experienced California divorce attorneys today. We are ready to help.
Contact our experienced Los Angeles firm
Divorce and family law issues are notoriously complicated and personal, which is why you must hire an attorney with years of experience, as well as the compassion and skill needed to handle these sensitive matters. For the qualified, dedicated legal representation you and your family deserve and need, contact Zitser Family Law Group, APC today.