Along with the emotional toll a divorce can take on British Columbia couples, the financial consequences can be devastating — often for both parties. The economic impact typically starts when the couple separates and less income is available to meet household expenses. While additional accommodations for one spouse will be required, it will come along with the attendant housing and utility costs. This situation can already start draining funds that may have been intended for retirement, education and more — only to be exacerbated by the division of property as divorce proceedings move forward.
Keeping emotions under control is difficult but necessary. It is important to focus on the issues, particularly those that may affect the post-divorce financial stability of each spouse. The type of assets allocated during the property division process may seem an equal portion of the whole, but some might be illiquid assets that are difficult to sell if the need for cash arises. The type of property may also have unfavorable tax implications; for instance, withdrawals on a tax-deferred retirement account will be taxable.
Taxation on ongoing income can also have an impact. Although the spouse who pays alimony (if applicable) is entitled to a tax deduction, the one receiving it must report the payment as income for tax purposes. These are important considerations for future tax filings.
Fortunately, help is available with these and other issues from experienced divorce lawyers who can provide the necessary support and guidance while also protecting the client’s interests. Family law lawyers in British Columbia, like us at Laughlin Family Attorneys, have resources available to assist during the division of property. These may include tax and financial advisors along with other professionals who can provide input on such matters as child custody concerns and real property issues.
Visit our office if you’re ever curious:
Laughlin & Company Law Corporation
2755 Lougheed Hwy #710, Port Coquitlam, BC V3B 5Y9
Source: Time, “Keep a Divorce From Killing Your Finances“, Jill Schlesinger, Accessed on April 7, 2017