Divorce is a painful, emotional experience, and without proper planning, it can also be a disastrous financial event. Once certain decisions are made involving your assets, there is no way to change them. Following are some valuable questions you must consider to ensure your family is well taken care of.

  1. How much will it cost to live after the divorce? Will you be able to financially survive?
  2. Will alimony be paid and for how long? (Keep in mind that    alimony is deductible by the spouse paying it and taxable to the spouse receiving it.) What about child support?
  3. Which parent will get to claim the dependency exemption for the children?
  4. What about financing the children’s college educations?
  5. Should one spouse keep the house?
  6. How will your retirement accounts be split? (It’s critical to discuss a “Qualified Domestic Relations Order,” which establishes a legal right to a portion of a retirement plan and ensures that your ex-spouse is responsible for paying the income taxes on any distributions that he or she receives. Without a QDRO, you could wind up paying the tax bill.)
  7. Are there potential hidden assets?
  8. If you or your spouse owns a closely-held business, how will it be valued?
  9. What are the tax consequences of property settlements?

These questions are a good place to start as you’ll discover many more during this long ordeal. Always keep in mind that once a divorce settlement is final, you will be unable to change many of the provisions.