Financial security is an important consideration when making long-term decisions. In some cases, individuals may decide that it is better to remain in an unhappy marriage rather than face the financial implications associated with a divorce. However, the majority of unhappy Michigan couples discover that while divorce does bring about a number of changes, once the financial aspects are addressed, each individual is able to move on and begin to create the life each desires.
Income is one aspect that should be considered. While it is possible that each individual will be financially stable based upon his or her own income, it is possible that one individual will be required to pay alimony to the other. The individual paying alimony is typically able to claim this as a tax deduction. Likewise, the individual receiving alimony must claim it as income.
Another consideration is income upon retirement. Social Security benefits can be an important factor for some individuals. Depending upon one’s Social Security benefits, it may be more lucrative to claim Social Security benefits based upon a former spouse’s work record. If the couple was married for at least 10 years, one spouse is entitled to claim benefits based upon this other income. However, this option is not available if the individual claiming benefits based upon a former spouse’s income has remarried.
Finally, once it appears that a Michigan divorce is imminent, each individual will want to review insurance, investment and bank accounts to make sure that everything is in order. It is likely that beneficiaries will need to be changed. Additionally, adjustments to these accounts may be necessary. Experienced legal counsel can provide guidance in deciding what steps the individual needs to take.
Source: CNBC, “Financial planning for divorce — it’s not just for women“, Beth Lynch, Oct. 2, 2017