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Divorcing? Get Ready to Review Your Finances

When you have a significant life event such as a marriage, the birth of a child, or a death, you must usually evaluate how this impact’s our finances. It might not seem like it, but divorce has just as large of an effect on your finances as any other life event. While marriage merges the financial lives of two people, divorce does the opposite, causing two people to become financially independent from one another. The ways in which your finances might be affected can be surprising.

Divorce often results in the parties moving out on their own. This means that a person will have many of the same expenses that they had while living with his or her spouse, but that he or she will be solely responsible for them. You must be ready for your expenses to go up while your income stays the same. So, although you might want to keep the house or the car, you just might not be able to.

You may be responsible for child support or alimony. This means that a significant portion of your income (decided upon by state law) will be taken from you to either care for your child/ children or former spouse.

You should also be aware of the tax implications of divorce. Selling the family home or the transfer of assets might have significant tax consequences. As does the payment and receipt of alimony.

Remember, Texas is a community property state, meaning that any property acquired during the marriage is considered to belong equally to both spouses and is divided as fairly as possible. Therefore, you might be saying goodbye or hello to significant assets in the interests of fairness.

If you are going to become self-sufficient after divorce, you must do your due diligence in evaluating your finances as soon as possible.

Although it is a good idea to consult a financial or tax profession during this time, it is an even better idea to consult with a qualified Austin, Texas divorce attorney.