Common Issues in South Carolina Divorce Settlements

Many South Carolina divorces are settled, rather than litigated. This option is more efficient and less costly, but you need to make sure you fully understand the consequences of your divorce settlement. Watch out for the following issues when negotiating your divorce and property settlement. Beware Tax Issues Most transfers incident to divorce can be made tax-free. However, there can still be a big tax impact of receiving certain assets in a property settlement. 401(k)s and IRAs are a prime example. These assets are made up of pre-tax dollars and will be taxed upon withdrawal of the funds. Depending on your tax bracket, you could be getting 20% or 30% less than you bargained for. You’ll also need a properly executed qualified domestic relations order, which is an additional expense. Keep tax issues in mind and consider whether you’d rather have other assets instead of retirement account funds, if possible. If you are taking pre-tax assets, make sure you estimate…

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