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Divorce missteps that can have negative financial consequences

When one is contemplating ending a marriage, it may be natural to focus on the emotional aspects. In reality, not paying close attention to the financial ramifications of a divorce may negatively impact one's future finances. Colorado residents who are preparing to divorce can avoid several mistakes that can harm them financially.

Those who are going through a divorce may be tempted to share news, both good and bad, on their social media sites. It is recommended, however, that one uses restraint in these posts as information that is shared could be used against one in divorce proceedings. It is advised that one compile a list of both assets and liabilities, including account numbers and balances, in order to assemble a comprehensive picture of what assets will be included in settlement negotiations. The list should include information regarding a spouse's Social Security earnings and expected benefits in case one may be eligible to receive benefits based on those earnings.

In addition, it is helpful to keep in mind how a home should be handled in the settlement. While a married couple can deduct up to $500,000 in profit from a sale on their taxes, a single individual can only exclude $250,000. The tax consequences of other assets should also be assessed, as taxes could negatively affect the value of certain retirement accounts and other assets. Furthermore, the changes to alimony tax laws may also become a factor.

Lastly, spouses may benefit from choosing how they wish to pursue their divorce. It may be possible to seek mediation or a collaborative approach, which could reduce some of the costs involved. Regardless of the method of divorce, the decisions made during the settlement can have a direct effect on one's future financial stability. Colorado residents who wish to secure the best agreement possible may benefit from seeking the assistance of an experienced attorney.

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