It is often the case that the marital home is sold as
part of a couple’s divorce, and the proceeds split.
When this happens, any costs associated with the
sale of the home are essentially split between the
parties. This is because these expenses come out of
the proceeds, which are then divided between the
two individuals.
Most homeowners are aware that when they sell their
primary residence, if they sell the home for more than
they paid for it, the IRS allows some portion of the gain to
go untaxed. However, many homeowners still think that
the old “rollover rule” still applies, although this was
replaced in 1997! So, although this is old news, let’s look
at the rules that apply to real estate sales.
The stimulus package enacted in 2020 includes some changes to the process of applying for financial aid, as well as changes to the formula that determines a family’s eligibility for aid. These changes are being phased in over the two academic years from 2023 to 2025. There’s some good and some bad to these changes for every family, and a significant change for divorced families.
Read MoreIn general, we Americans are not great savers. As of the end of 2020 the personal savings rate[1] was 13.7%. According to SmartAsset.com, the median retirement savings among all adults, measured in 2019, was $65,000. It is not surprising then that 64% of Americans don’t believe, or aren’t sure, that they are saving enough to retire.
[1] https://www.statista.com/statistics/246234/personal-savings-rate-in-the-united-states/
Read MoreIt is rare for a brand new type of financial asset to be introduced into our lives. One example in our experience would be mutual funds which, while created in the 1920’s, didn’t become a popular investment vehicle until the late 1970’s. Following on its heels was the exchange-traded fund, developed in the 1990’s.
Read MoreDivorce takes time, and in some ways we shouldn’t push it along too fast. Ideally the divorcing couple should engage in thoughtful discussion around such topics as the parenting plan, how to divide assets or who stays in the house. But there are some aspects of the process that can be time-consuming or just take an extended period to accomplish and it would help to get these going as early as possible.
Read MoreIn 2018 a new tax credit was conceived, the Retirement Savings Contribution Credit, or “Saver’s Credit.” To help lower-income individuals save for retirement (and take some of the burden off the government), this credit was created as an incentive. Here is how it works.
Read MoreIn the best of times credit cards serve a valuable purpose. But as we know, they are prone to overuse, and the consequences of such may be deep financial difficulties. This is of particular concern with a divorcing couple as it is common that credit cards are issued in both names. The use of joint credit cards should be addressed at the beginning of the divorce process.
Read MoreOne of the most popular forms of saving for college is the 529 Plan. Named after its section of the IRS code, the plan is a way for parents to squirrel away money for their children’s educations on a tax-deferred basis. If the money is spent on a qualified college education expense, then withdrawals are tax-free (if withdrawn for any other purpose the owner is subject to income tax and a 6% penalty). These accounts have become even more popular in the past few years, since the 2018 Tax Cuts and Jobs Act extended the definition of a “qualified educational expense” to include $10,000 per year of tuition for grades K-12.
Read MoreYour new divorce client needs help. She’s ceded control of the family finances to her husband for 32 years and knows nothing about what’s going on. She has no idea what she spends or what she is going to need and wouldn’t know where to put her fingers on their investment statements.
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