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Frequently Asked Questions
Q: Should I get the house in the divorce if the children are going to be living with me?
A: The answer is maybe. The home is often one of the largest assets in a marriage and therefore, figures prominently in the division of property. It is important to consider a number of factors before deciding who, if anyone, should keep the house. You will need to determine the following:
- the costs associated with maintaining the home, including taxes and inflation
- whether or not there is enough money to live comfortably in the house
- what other assets you will be “giving up” to keep the house
- the current state of the economy
- real estate market conditions
Q: Am I eligible to receive alimony?
A: When determining alimony eligibility, several criteria are considered. They include, but are not limited to:
- Need – ability to support yourself on earned income and investment income
- Ability to pay – does the person paying alimony have enough funds to pay?
- Length of marriage – a marriage lasting more than 10 years is considered “long- term”
- Health of both parties
Q: What is a QDRO?
A: QDRO stands for Qualified Domestic Relations Order which is a legal document that is required to divide a qualified pension or retirement account (including 401ks) pursuant to a divorce. It is best to hire a professional who specializes in QDROs to draft this document to ensure that it is done correctly and completely. A QDRO is not required to divide an IRA.
Q: If two assets are worth the same, does it matter which one I get in the divorce?
A: YES! Before deciding who gets what in a divorce, you need to evaluate several factors with regard to specific property such as:
- Liquidity (can this asset be sold or easily converted to cash?)
- Cost basis and tax obligations associated with the sale of an asset
- Penalties associated with liquidations or early withdrawals (ex: funds in an IRA can be subject to taxes and a 10% penalty if withdrawn prior to age 59 ½)
Q: What is the cutoff date to determine how to file our income taxes for the year in which we got divorced?
A: Your marital status when filing your taxes is determined by your status on December 31st. If you are divorced on or before December 31st, then you must each file as single taxpayers for that year. It does not matter how long you lived together as a married couple during the year. You can file Single, Head of Household if you meet the tests established by the IRS. (see www.irs.gov for head of household criteria).