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Attempt to save money on divorce may prove costly

The end of a marriage can occur for any number of reasons. Many times, the couple is unable to agree on anything of substance throughout the marriage; therefore, it makes sense that they will be unable to agree on the terms of their divorce. However, there are some California couples who, although they no longer wish to be married, are able to negotiate specifics regarding their divorce.

At times, when a couple is able to address these issues, the thought of trying to save money comes into play, and they decide to forgo consulting with an attorney regarding their individual divorce specifics. Many times, such a decision can actually prove more costly in the end. Although their decisions may appear to be sound, there can be other concerns, such as taxes, that could have a negative impact.

For example, if the couple decides to cash out part of one of their 401K accounts to pay off debts prior to the divorce, it is possible that one party will benefit while the other incurs a tax penalty. In this instance, both individuals will benefit if the debt paid off was to be split between the two. However, unless other provisions are made, the individual who cashed out the 401K will be the only one to pay the early withdrawal penalty.

Many times, decisions made during the California divorce process appear to be a good idea. However, there are often specifics that are not considered. Even when the couple is able to agree upon how property should be divided, child support and child custody should be handled and more, it usually proves beneficial for each individual to seek experienced legal guidance.

Source: Forbes, "IRA Withdrawal Penalty A Cost Of Do-It-Yourself Divorce", Peter J Reilly, June 30, 2017

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