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The major financial issues in a divorce

On Behalf of | Oct 26, 2016 | Divorce |

New Jersey couples who are ending their marriages know that money is often an issue. When children are involved, custody is often the primary concern of divorcing couples, but most of the other major ones involve the division of assets and debts.

Property division terms can be negotiated by the couple, but if they cannot come to an agreement, the court will decide. New Jersey follows the principle of equitable distribution, and judges will make their decisions based upon what they deem to be fair. This does not necessarily mean an equal split, however.

Debts must also be divided when a couple ends their marriage. Some couples choose to sell their home or other assets in order to pay off debts. It could be possible to negotiate for one spouse to pay off certain debt in exchange for receiving certain assets.

Taxes are another issue to be dealt with. Filing status is determined as of the last day of the taxable year, which means that unless a former spouse remarries in the following year, he or she will not be able to file a joint return. There are tax consequences related to alimony as well. In general, the party paying alimony can deduct it while the recipient must include it as income. Child support, however, is not deductible, nor is it considered income.

A divorcing couple could avoid having a court decide on their finances if they can come to an agreement on their own or with the help of their respective attorneys to handle their divorce negotiations with a view towards entering into a settlement agreement. They may be more satisfied with the result than if they left the decision up to the court.

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