Filing Status How are you going to file your taxes. Determine the best way financially to do this. Normally filing a Married Joint Return will result in the lowest taxes. Do not look at a joint return as any kind of "attachment" to your spouse. This is strictly a financial situation. You qualify for the Married Filing Jointly status if you are not yet divorced. You do not qualify for this status … [Read more...]
Archives for May 2017
Tips for Dealing With a QDRO
Qualification Decision: Once the plan has approved the DRO as qualified, be sure to obtain written confirmation of this fact with identification of the exact document. A copy of this qualification decision should then be forwarded to the Alternate Payee for their permanent records. Review Old QDROs: Consider reviewing old QDROs every three to five years, since plans can terminate, parties … [Read more...]
Separate Interest Division
Under the separate interest method, the plan is valued as of a certain date and split in two. The Separate Interest owned by the Alternate Payee may then be received by any method she chooses, continue until her death and is not affected by the death of the Participant. Conventional wisdom is that the most desirable method is a single life annuity based on her life expectancy. This will, however, … [Read more...]
Post-Divorce Allocation, Earnings, Appreciation & Contributions
Immediate Steps As soon as you are notified of the plans involved in the property settlement, it is advisable to contact the Plan Administrator immediately to give notice of the impending divorce and division of assets. Ask them to avoid making distributions prior to receipt of the DRO, if possible, and to be aware of any sudden shift in asset allocation that would be detrimental to the Alternate … [Read more...]
Preparing financially for divorce will help avoid costly pitfalls
Divorce can be a long and arduous process once it gets started. If you can buy some time before you file, doing your homework ahead of time may produce big dividends. Read books and learn all you can about the divorce laws in your state. Timing your divorce may also be financially wise. Meeting with a Certified Divorce Financial Analyst such as myself also can provide you with a deeper … [Read more...]
PWBA – Pension and Welfare Benefits Administration
PWBA Booklet: The Department of Labor, Pension and Welfare Benefits Administration, QDROs publishes a booklet entitled The Division of Pensions Through Qualified Domestic Relations Orders. The PWBA booklet’s mandate to benefit plans encourages them to be helpful in working with attorneys, Alternate Payees, participants, courts and State IV-D Agencies. Detailed procedures are outlined, including … [Read more...]
Your divorce may require the assistance of a financial expert
Given the complexities of today’s financial landscape, it may be in your best interest to consider securing specific expertise to help you sort out and evaluate the financial aspects of your divorce. One important thing to remember is that most family law attorneys, even when experienced in divorce, are not trained to address financially complicated divorce issues. As a key participant in … [Read more...]
The five most common myths regarding divorce finances in Texas
1. Myth: Assets are always divided 50/50 Fact: Texas divorce law does not support the common belief of splitting marital assets 50/50 The State of Texas requires a “just and equitable” division of property. A 50/50 settlement is rarely appropriate and should never be implemented without expert advice, and ideally, using an analysis of the situation by a Certified Divorce Financial Analyst. … [Read more...]
QDRO – One Document That Can Rule Your Life
The Complete QDRO Handbook by Carrad PWBA Booklet: The Department of Labor, Pension and Welfare Benefits Administration, QDROs publishes a booklet entitled The Division of Pensions Through Qualified Domestic Relations Orders. The PWBA booklet’s mandate to benefit plans encourages them to be helpful in working with attorneys, Alternate Payees, participants, courts and State IV-D Agencies. … [Read more...]
Divorcing couples may qualify for a tax break on home sale gains
In many divorces, couples end up selling the family home — before, during or shortly after the divorce — in an effort to practically adjust to post-divorce lifestyles and expenses. In order to avoid paying federal income tax on the gain on a home sale, divorcing couples should explore their options — preferably before the divorce is final — to use the federal income tax exclusion. Depending on … [Read more...]
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