Divorce is a complex process that will impact your financial and taxation situation now and in the future. To help you understand the full range of your financial options, and identify the short, medium and long-term implications of any proposed divorce settlement, we've come up with 10 must know points.
1. Money will almost always become an issue in divorce
• Many people start out thinking and believing the promise that things will always be divided evenly and straightforward
• Money is sometimes used as a bargaining tool to resolve other issues
2. Gather everything you can about your family finances
• Make a list of your financial property
• Gather statements and documents on all property
• Frequently one partner is not "in-the-know" on the family finances which makes this task difficult
3. Understand that a 50/50 division of property is not always fair financially
• Take into account future value of property
• Comparable values of different types of property are not always equal due to tax implications
4. Consider the tax implications of all of your financial divorce decisions
• Consider the year in which you divorce, your change in marital status will affect your tax situation
• Consider the tax effect and true value of the assets you will retain
5. Make sure that you can afford to keep the house before you settle this matter
• Pre-qualify for a mortgage
• Upkeep costs can be expensive, both financially and emotionally
6. Understand the value of your investment and RRSP portfolios
• Understand tax liabilities and advantages of different investments
7. Ensure pensions are properly valued
• Defined Benefit Plans must always be valued by a specialist
8. Make sure that the payer of child and/or spousal support has life insurance to support these financial obligations
9. Seek financial consultation during your divorce from a divorce financial expert not from a lawyer
10. Redo your will
