A divorce is often a very emotional experience for the entire family. However, it’s important to try to maintain a clear head through the process so that financial concerns can be addressed rationally. When divorcing spouses in Texas understand how property division will affect finances, they will be in a much better position to negotiate for a fair settlement.
After a divorce, many people will be living on a single income rather than the double income that they were accustomed to. By taking this fact into account, a spouse may have a better understanding of how much alimony or child support they should pursue and whether they will be able to afford to make mortgage payments on the family home.
While property division negotiations are underway, it is important for divorcing spouses to take tax consequences into account. If a spouse wants to pursue alimony, they must understand that the payments will have to be reported to the IRS as income. On the other hand, a spouse who pays alimony will be able to deduct the payments on their annual tax return. Retaining the family home will also come with tax consequences, as the party who keeps the home will be responsible for paying property taxes.
When there are several different types of assets at stake during property division, it is important for all of them to be properly valuated so that a fair settlement can be worked out. A family law attorney might assist a client who is facing the end of a marriage in accounting for all of the marital assets in order to then negotiate an appropriate settlement agreement.