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Consider the costs involved in proposed divorce settlements

The process of getting a divorce can be draining, emotionally and financially. However, in spite of the temptation to reach a divorce settlement as quickly as possible, it may be more prudent to fully investigate the financial consequences of any settlement proposals. Colorado residents are best served by seeking the advice of professionals before accepting any proposed terms.

A divorce is not just ending a personal relationship with another individual; it also entails the separation of marital assets and liabilities. This process can become complicated and may wind up costing one or the other if one is unaware of the tax implications during property division negotiations. It is in each party's best interest is collect all pertinent financial documents in order to have a complete financial picture of all assets involved. One of the biggest liabilities may come in the form of taxes that may be owed both during and after the divorce. Spouses may choose to work together to reduce the tax burden and then divide any savings.

If one spouse handled the majority of the household financial affairs, it may be beneficial for the other spouse to consult with a professional advisor before reaching any agreements. Certain accounts may come with a tax liability after they are accessed. Likewise, a spouse may also be taxed on assets that are received in a settlement agreement. It is recommended that each individual consult with his or her own advisors before deciding how both assets and tax burdens should be divided.

Before consenting to any agreements, the value of proposed assets should be based on their after-tax values. Accepting an asset that will be taxed or has other negative implications could wind up costing a former spouse. Colorado residents who are preparing to file for a divorce can consult with an experienced family law attorney who can help provide sound financial guidance.

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