Debt and Taxes: Who Owes What?
Debt and taxes are probably two of the most overlooked considerations when working out a settlement. If they originated during the marriage, they are a shared responsibility and will be divided between the spouses’ right along with the division of assets.
Marital debt most commonly falls into one of the following categories:
- Mortgage/real estate loans
- Credit cards/credit lines
- Vehicle loans
- Student loans
- Personal loans
- Legal settlements
- Liens on property
- Business debt
- Prior spousal support/child support
Tax considerations that may impact you after the divorce:
- Tax filing status change
- Loss of some or all dependants
- Deductions both personal and business
- Payment or receipt of spousal support (alimony)
- Payment of child support
- Taxable event related to liquidation of an asset
- Unpaid taxes
Take time to research and discuss these debt and tax considerations with your Certified Financial Divorce Analyst® CDFA™. Insure that your financial settlement agreement addresses the items that apply to your specific divorce.