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What finances should be of top concern for divorcing couples?

Most people who go through the divorce process find it a trying time in their lives because it forces them to consider things they hadn't thought about since they married. We're talking, of course, about finances and this can lead to contentious arguments if divorcing spouses aren't prepared.

Just like when you got married, there are certain changes that need to be made regarding financial accounts. But knowing which ones are most important can be hard, especially if you let your emotions take control.

So what finances should be of top concern for divorcing couples? Let's take a look.

Liabilities. Discussing your debts and liabilities with your soon-to-be ex-spouse is always a difficult conversation to have but perhaps one of the most important ones as well. Because debts and liabilities can be split during the property division step of the divorce process, spouses should know what they are responsible for so as not to be surprised by them later on.

Immediate cash flow. If you're not as involved in the finances as your spouse then you could find yourself at a disadvantage during the divorce process. That's because you won't know how much money you will need to provide for yourself or where money is currently being funneled for bills.

Getting involved in your finances prior to a divorce is a good idea, especially because it will not only give you an idea of the state of your assets but which ones, such as stocks or retirement accounts, can be cashed in quickly to increase cash flow during the divorce.

Tax returns. It's important to consider how your tax return will be affected after you divorce. Everything from Roth IRAs to alimony payments can have an effect on your taxes and may change your tax bracket and your end refund amount. A look at past tax returns can help you realize what assets would benefit you most and are worth asking for during negotiations.

Other assets. Finally, there are some other assets you might not have considered that could have a huge impact on your finances after a divorce. Things like retirement accounts, Social Security, veteran's benefits, pensions and life insurance policies can all come into play later on in life and should be considered now rather than later when it may be too late.

Source: Market Watch, "Divorce? The 6 worst money mistakes," Leslie Thompson, Sept. 23, 2014

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