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How to Financially Survive Divorce

43131755 - divorce agreement. wife and husband can not make settlementMost people have been exposed to divorce either directly or indirectly and can attest to the impact it has on all involved. Some people avoid the couple and some get far too involved. One of the most damaging aspects of divorce is the financial damage that can be caused if you don’t address the money side as soon as possible.

A “friend of a friend” had been married for a number of years when they found out their spouse was cheating. Emotionally devastated, this friend didn’t know the steps to take to protect themselves. So while they sorted through how they felt and where they wanted to go, their spouse was spending all their money and amassing a large amount of debt. By the time next steps were decided, this friend was now financially responsible for half of the debt.

If this were you, would you know the steps to protect yourself from that level of financial destruction? Did you know if you are directly involved in a divorce, one of the people that can help is your Financial Advisor. At YourStyle Financial, we can help you organize your financial information which will allow you to effectively and efficiently work with your spouse and lawyers. This can also help reduce legal fees, which assists in financial recovery. We’ll start the conversation with a Checklist-divorce-2017 and go from there.

This is just an inch in the well of information and assistance we are able to offer. We’ll be writing again soon on dividing assets and dealing with debts. If you think we can help, be sure to contact us in the early stages of potential separation or divorce.

FAQ: How Can I Deduct Interest?

One of the pitfalls of investment (well, aside from the risk factor) is the income you received via interest, which of course is susceptible to taxation.

How one can make interest a tax deduction is a common question that comes up in our offices from time to time so we wanted to share a couple points with you today.

The first thing to know is that loans become part of the equation. This must lead to income from a business or property in order to qualify for deduction. Second, the interest can only be from that taxable year and legally you must pay back said loan. Such borrowed funds also need to result in grains income (excluding capital gains).

As a result, the loan interest must be in one of two forms:

1. Borrow-to-earn – a loan that is used to purchase assets that result in income (such as from your business).

or

2. Rearranging existing debts – for example, pay off an existing mortgage and convert to a non-deductable borrow with the intent of investing proceeds.

There are, of course, other factors that come into play, so we do advise setting up a meeting with one of our advisors to talk about your deductable income (either interest or other).