Pennsylvania residents who are not married but are involved in civil unions or domestic partnerships do not have the option of filing jointly on their federal income tax returns. However, married individuals, including those in same-sex marriages, must select either joint or married filing separately as their status. In many cases, separate filings can result in the loss of certain tax benefits, but in other cases, separate filing is the better choice.
Individuals in Pennsylvania may not know that they need to complete certain paperwork in order to distribute retirement accounts as part of a divorce settlement. For an individual retirement account fund, a transfer incident is necessary. For an employer-sponsored plan or a 401(k), a Qualified Domestic Relations Order is necessary.
Hiring a forensic accountant can be very important for a spouse who is going through a high asset divorce in Pennsylvania. When there are substantial assets involved, a forensic accountant can make sure that they are all accounted for and properly valuated. A forensic accountant may also be useful when a person's ex-spouse is attempting to hide certain assets and misrepresent their income or net worth during property division.
Newly married couples should consider all of the benefits and drawbacks of joint bank accounts before deciding how they will handle their money. Joint accounts encourage the couple to communicate about all expenses, but this can lead to fights if one party is a saver and the other a spender. Keeping all of the couple's money in a single account also makes it easier for them to keep track of their budget.
A Pennsylvania resident who receives alimony or child support because of a court order may depend on those funds to make ends meet. However, the death or disability of the paying party could undermine one's budget quickly. Fortunately, insurance products are available to guard against these possibilities, and in many cases, judges will require some such precautions as part of a divorce order. Life insurance is much more commonly ordered, but an awareness of disability options could head off later financial problems for both parties to a settlement.
Many Pennsylvania residents who have gone through a divorce may be interested to learn that they may be able to claim Social Security retirement benefits based on their ex-spouse's earnings, if the marriage lasted at least 10 years. When a person is still working but over the age of 62, they can either elect to receive benefits based on their ex-spouse or strategically wait to claim then at age 66.
When facing a divorce, some couples in Pennsylvania may expect to continue the lifestyle they led while married. However, when a marriage splits, so do the finances. People who are contemplating a divorce can take some steps beforehand to plan for their financial situation afterward.
While the divorce of Jennifer Garner and Ben Affleck may be news due to their celebrity status, there are lessons that many people can take from their case. For instance, the couple is planning to divorce just before their 10th anniversary. Although it is unlikely to be much of a factor for them, waiting to dissolve a marriage until after reaching that milestone could enable one or both parties to claim additional Social Security benefits.
Pennsylvania couples who are going through a divorce may not give the financial aspect of the process the attention it warrants. Emotions can make it difficult to make the right financial decisions and often lead to serious mistakes. One of the most common financial mistakes made at this time is when one spouse is unaware of some of the couple's marital property or of general household finances.
When people have been married for a long time, they often have built up significant assets, including such things as retirement accounts. When they divorce, 401(k) accounts are often considered to be a part of the marital estate, and thus are subject to division.