Mingling Finances After Divorce Could Be Dangerous
Divorce is a subject that will inevitably be troubling the minds of some residents of Louisiana at any given point in time, and a recently written article concerning some of the dangers of post-divorce tax filing may prove enlightening for someone who is so afflicted. According to the author, most people acknowledge that physical intimacy after a divorce can be quite a bad idea, but few indeed give equal consideration to the continued intermingling of one another’s finances. However, he considers the latter to be a far more serious concern.
To emphasize his point, he makes reference to a man that entrusted his former spouse with his tax information after their permanent separation so that she could file jointly, as had been their custom. Probably expecting to avoid financial headaches in this way, he was shocked to learn that she’d underreported his income to generate a refund for herself and fraudulently managed to transfer large sums of money from his individual retirement account. Later, the Tax Court ruled that it had been unreasonable of him to trust her with his information. While he was able to recuperate some of his losses, a fair amount was nevertheless lost. According to the author, his case illustrates why it’s important to fully extricate yourself from another after a divorce.
The end of a marriage can be a difficult time for both parties, and the prospect of rearranging one’s tax information in its aftermath could certainly be unappealing. However, if someone fails to do so, they could open themselves up to problems similar to those encountered by the gentleman the author’s anecdote relates.
Particularly in a high asset divorce, property division can be a contentious issue and the subject of much dispute. While much attention is often given to real estate assets, separating couples may wish to pay equal attention to the evenhanded redistribution of their financial assets to avoid further complications and help them achieve greater fiscal independence.
Source: Forbes, “Post Divorce Tax Intimacy Can Be Riskier Than Post Divorce Sex“, Peter J. Reilly, January 07, 2014