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Common misconceptions about finances in divorce

Divorce is fraught with emotions that can cloud one's judgment during the process. Some simply want to be done with the process may make decisions without completely understanding the future implications (even though they may indicate that they do). Nevertheless, it is critical to know what the terms and conditions of a divorce decree means, as well as how payments (such as alimony and other asset transfers) are calculated. 

With that, this post will focus on common misconceptions that can affect one's decisions.

Misunderstanding maintenance - Many people believe that permanent maintenance is actually something that cannot be modified later, when it certainly can be changed. Changes in circumstances (i.e. remarriage, changes in income) can lead to changes in alimony.

Expectations about refinancing - Some divorcees have unrealistic expectations about being able to refinance a home (or a car) during a divorce. Given how lending rules have changed after the housing crash, it may be particularly difficult to obtian a new loan during a divorce.

All the money in a business is on paper - Money is commonly hidden in business. It is helpful to use a forensic accountant to track down money that may not show up on a balance sheet.

Stock transfers are not taxable - On the contrary, stock transfers incident to divorce may have tax implications just like any other sale of stock, and the selling party may have to pay taxes on any profit realized.

If you have questions about other financial questions, an experienced family law attorney can help. 

Source: Chicagonow.com, 12 common financial mistakes in divorce, September 12, 2013

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