Financial factors impacting divorce in Tennessee

Economic factors play a big part in today’s divorces. This includes how to split retirement accounts during divorce.

A report published online by WPBF.com in 2013 listed Tennessee as having the tenth highest divorce rate among all states in the nation. The report noted that 12.7 percent of all residents in Tennessee are divorced. In contrast, New York and New Jersey tied for last place with the number of divorced persons at 8.5 percent of their populations.

Additionally, statistics reported by the U.S. Centers for Disease Control and Prevention indicate that 4.3 out of every 1,000 persons in Tennessee was classified as divorced in 2011. These numbers make it clear to see that divorce has widespread reach among a large part of Tennessee's population.

With many facets involved in the property division portion of a divorce, the opportunity for financial loss to one or both party always exists. Understanding how finances may influence divorce and what financial issues should be addressed in a divorce is important for all spouses.

Financial factors influencing divorce

A University of Maryland sociologist has turned what had been a common belief on its head. When the divorce rate in the U.S. dropped during the recession, many people attributed that to couples using a difficult time to grow stronger in their marriages.

However, the sociologist points out that as soon as the economy began turning around, the divorce rate began going back up. His belief is that divorces were not avoided but simply postponed because people could not afford them for a time. Once divorces were able to be funded and withstood again, they happened. His report estimates that up to 150,000 couples put off the decision to divorce due to this reason.

Divorce factors influencing finances

One type of asset that is commonly involved in the property division portion of a divorce today is a retirement account. An article in the Huffington Post is quick to point out to divorcing spouses that jumping at the chance to retain or receive these assets may not always be the best bet in the long run.

Issues such as whether or not an account is funded with pre-tax dollars-and therefore whether or not taxes will later be owed-should be carefully considered before a decision is made. Weighing the pros and cons of a retirement account should also be done in conjunction with other assets so that the big picture view is achieved.

The best advice

Working with an experienced attorney even at the early stages of contemplating a divorce is always advised. The possibility for great financial loss can be minimized with the right professional assistance.

Keywords: divorce, property, division, finances