You probably understand that your finances will be affected because of divorce. But knowing more specifically what will be affected and penalties you could incur might save you money and frustration later on. Here are a handful of financial facts and fallacies for you to consider. True or False?
1. Hiding my assets is a good way to protect them from my spouse.
Answer: False. If you are hiding assets during a divorce, their discovery will not only mean you must include them in property division, but under Nevada law you could also be fined.
2. There’s nothing positive about paying alimony.
Answer: False. Alimony is not only a liability, but it is also an asset. You can declare alimony payments you make as a write off on your taxes at the end of each year. On the other hand, if you are the one receiving alimony, you must report this as income and it will be taxable income.
3. Your most valuable asset is your house.
Answer: False. You may have a valuable house; however, your most valuable asset may be your retirement accounts. This is because of the future value that account may hold. If a judge deems that a retirement account will be much more valuable as time goes on, that account may have a higher value when considered during the divorce in the property division. Financial experts may be hired in making this determination, as well as the judge’s opinion. Speak with an attorney for advice on property division.
4. Only men have to pay child support.
Answer: False. Based on the amount of custody allocated to each parent and the income level of each parent, women do sometimes pay child support to their spouses.
5. You should always have the best interest of your children uppermost in your divorce decisions.
Answer: True. We may like to think we will always keep the best interests of our children uppermost in divorce decisions, but that is not always the case. Divorce can be stressful and highly emotional.
As you can see from just this short set of true/false questions, divorce finance can be complicated. It is always wise to understand your rights by consulting an experienced attorney.