Even the most amicable divorce can have a significant impact on your finances. Knowing the laws that govern the division of assets during a divorce is an important first step in protecting your financial health throughout this difficult period.
The division of assets in a divorce depends on the state where you live. Judges in community property states typically divide assets equally. Judges in common law property states typically apportion assets based on a variety of factors. The same is true for debts.
Retirement assets are also divisible in a divorce. To avoid tax liabilities on any 401(k) assets you may receive, arrange to have them rolled over directly into an IRA. Qualified Domestic Relations Orders are used to protect the divorced spouse's interest in future retirement payments. Above all, you should consult with a divorce attorney before proposing or making any settlement.