Recently divorced Kentucky residents may have an urge to sell investments or splurge on a new home or car. However, these can be among the worst decisions a person can make after ending a marriage. By selling stocks or taking distributions from a 401(k), it may necessary to pay extra taxes. Those who take money from a 401(k) before age 59 1/2 could have to pay another 10 percent early withdrawal fee.
Getting the house in a divorce settlement isn’t always a good idea either. While a home may have sentimental value, it can cost a lot of money to maintain. Keeping the house can also be a poor choice if there is negative equity in it.
Alimony is another important consideration for many exes. Some may believe that quitting their jobs to avoid alimony is a good way to spite their former spouses. However, it is generally just a way to spend more time in court and pay more in legal fees. Furthermore, it is unlikely that a person can remain unemployed forever.
Regardless of what a person’s goals are after a divorce, it is important to have a comprehensive financial plan. Creating a plan may reduce the chances that an individual will make decisions based on emotion rather than logic.
After a marriage ends, a person may feel a variety of emotions, such as sadness or relief. Unfortunately, those feelings may lead a person to make potentially harmful financial decisions. Hiring an attorney can make it easier for a person to learn more about how alimony or child support amounts are determined. A lawyer could also help a client create a financial plan after a divorce.