When a couple decides to split, there may be much more on the line than who gets the house and who gets the wedding china. A New Jersey couple who is pursuing a high-asset divorce should think about how divorce can impact finances now and in the future. Regardless of who earns the most or who gets the house, every aspect of a person's financial life can be altered by the split, even when it is completely amicable.
Credit scores can play a major role in how each party moves forward. Any credit cards that are jointly held should be monitored so that one party does not end up paying for charges made by the other. Closing accounts can be detrimental, especially for the spouse who didn't earn the bulk of the income. If the spouse that earned less depended on the other for his or her credit, it may be difficult to build credit after a divorce. It is recommended that the formerly dependent spouse pays down any existing credit cards and tries to qualify for his or her own credit cards.
In addition to impacting credit scores, a high-asset divorce can greatly impact retirement plans and savings. Each spouse may find that he or she needs to re-evaluate his or her plans and possibly extend his or her projected retirement age. Also, the beneficiaries noted on retirement plans may need to be changed after a divorce.
A high-asset divorce in New Jersey can be complicated, causing issues ranging from new tax filing statuses to the division of assets, such as pensions and properties. A high-net-worth divorce may be difficult for both parties to navigate, especially if they are not aware of the full financial consequences of their decisions. New Jersey residents facing divorce may want to ensure that they are fully aware of what to expect from life after divorce.
Source: The Washington Post, "5 ways to keep a divorce from being needlessly expensive", Jonnelle Marte, Nov. 1, 2014