Some financial implications of getting divorced in Ohio are obvious to everyone. Each spouse will receive an equitable share of the marital property, meaning each will have significantly fewer financial resources than before. Assets usually subject to division include the family home, bank accounts and investments.
But unless you are very knowledgeable about divorce, there are other consequences that you probably are not aware of. Here are a few things to keep in mind.
With the income tax deadline just a few weeks away, it may be helpful to know what divorce-related payments are tax-deductible and which are not. In general, spousal support is considered a taxable event, which means the payor can deduct the payments from his or reported income, and the payee must report it as income.
However, property transferred between spouses or former spouses is not a taxable event for either party, as long as the transfer is due to a divorce or dissolution.
A portion of a retirement account or pension can be paid to a non-participant — in this case, one’s ex — as a percentage of the participant’s monthly benefit. To do this, the non-participant’s attorney must draft a document known as a Qualified Domestic Relations Order, or QDRO, and send a copy to the plan administrator. If everything is in order, once the participant retires or otherwise becomes eligible for the benefits, his or her ex will receive a portion.
For Social Security, the process is easier. A divorced person who was married for at least a decade to a person whose work history qualifies him or her for Social Security benefits is also entitled to benefits. However, most of the time, to qualify for Social Security this way, you must not remarry.
A big part of a divorce attorney’s job is ensuring that his or her clients are left in a secure financial position at the end, by combining legal knowledge with strong negotiating skills.