Divorce is a complex process, and timing it right can be a challenge. Deciding whether to file for divorce during the holiday season or wait until after the new year depends on several factors. There are pros and cons to both. Familiarizing yourself with all of the variables associated with each timetable will allow you to determine the time that suits you and your family best.
One important thing that impacts the legal decisions associated with divorce, such as property division and child support, is the “date of separation.” Not all states follow the same standard here, but it generally refers to the date upon which you and your spouse no longer live together as a married couple, which can be when one of you move out of the house, hires an attorney, or file for divorce.
Divorcing Early in the Year to Simplify Accounting
A common reason for couples to file for divorce early in the year is that it simplifies accounting. This provides a clear year-end break so tax departments and courts can classify your earnings as separate property.
If you divorce shortly after the new year, you have easy access to all your important documentation from the prior year:
- Fiscal forms (W2, 1099…)
- Retirement account summaries
- Credit card and bank statements
Ensuring Separate Property as Soon as Possible
Your date of separation determines what income can be classified as marital property vs. what cannot. Any income or bonus payment earned before the date of separation is marital property, regardless of when it is effectively paid.
If you or your spouse owns a business, you will want to review your state’s requirements. The valuation date of your business can be a timing factor for the divorce, especially if its value has recently changed a lot or is expected to in the upcoming months. The valuation date may be the filing date or the trial date of your business.
Consider Your Healthcare Insurance
If you and your spouse are planning to remain on the same health insurance plan for the following year, filing after the new year may be the appropriate choice, depending on the type of insurance provider you use.
If your benefits come from the state or federal healthcare insurance marketplace, the timing may vary from state to state. Check with your provider for accurate information, so you know whether your health insurance impacts when you file for divorce.
Divorcing Later in the Year to Minimize Uncertainty
You may not be able to create a clear projection of what your income will look like during the year, whether due to the general economic uncertainty or your personal situation. In this case, you may choose to hold off on divorce until you have a better idea of your finances later in the year.
If your income significantly decreased during the previous year, you may want to wait to file for divorce until you receive your tax returns. This can make a difference whether you are the payor spouse or the payee. By filing later in the year, the financial support you must pay, or would receive, is accurate according to your current income.
Deciding How to File Your Taxes
Deciding whether you want to file jointly or separately for your taxes greatly impacts when to divorce. Your marital status for income tax purposes is determined as of December 31 of the tax year.
If you want to file jointly for tax benefits, you must avoid having your divorce judgment issued before the end of the tax year. In this case, we recommend filing for divorce after the new year. If filing separate tax returns is a good option for you, you can divorce before the year end without any concern.
If you divorce during the current fiscal year, make sure to gather end-of-year statements such as:
- Household budgets
- Joint and personal assets
- Mortgage payments
- Any debts balances (including credit cards)
- Checking account balances
Choosing What Is Best for Your Family
Financial and professional factors play a significant role in divorce, but your personal life is also important. When you have children, the decision process can be even more complex, often impacting when to file for divorce. The holiday season may be a good fit for your family and may help to smooth over some of the difficulties as all of you decide to move on.
There is no clear answer as to what time of year is best for divorce. It all comes down to individual circumstances and preferences. While the holiday season may help with the transition, it may also add more stress to an already busy time with many social events. Having a detailed discussion with your spouse helps planning for how the festivities should be handled, whether you are divorcing before or after the new year. Our lawyers can help you with all legal procedures, but the close connection to your children puts you in the right position to make decisions for their emotional well-being.
If you are considering filing for divorce, call our lawyers at Gille Kay Law Group, PC today at (626) 340-0955 for more information.