Mistakes You Need to Avoid During the Divorce Process
One of the biggest mistakes individuals make during the divorce process if failing to protect themselves financially. Divorce is filled with emotions and emotions get in the way of navigating the divorce process in a manner that does not leave most without regret.
Below Are A Few Mistakes People Make During The Divorce Process:
- Don’t have unrealistic financial expectations. Divorce means splitting one household into two. Two or even one income goes a lot further when supporting one household. Try to stretch the income you have to cover two households and financial belts are going to have to tighten. Expect it and plan ahead so you don’t find yourself in the hole financially.
- Refusing to communicate. It is easy to say put aside anger at your spouse, a lot easier to say that actually do. Putting that anger aside and communicating will save you money in the end. If you can only communicate via attorneys, you will pay a fee for every communication. As I said above, you will have two households to support. The less money you give a divorce attorney the more left over to support those two households.
- Engaging in an adversarial divorce. There is nothing divorce attorneys love more than clients who want to do battle in divorce court. The less willing you are to negotiate with your spouse, the more money the divorce attorney will make. Use a mediator, be willing to compromise and don’t let your need to be right cause you to spend years paying divorce attorneys and court costs.
- Failing to understand what "equitable distribution" means. Most are under the impression that equitable distribution means an equal share or 50/50 split of marital assets. Instead of a 50/50 split that would mean each spouse receiving half of the marital assets, equitable distribution looks at the financial situation of each spouse, both before and after the divorce.
If a woman has not worked in decades, has no marketable skills and needs to rebuild her career it would be more equitable for her to be awarded more financially during the divorce.
- Forgetting to take into consideration tax implications. Every financial decision made during the divorce process has a tax consequence. Who will claim any children as dependence? What is the value of any stock portfolios and capital gains? It pays to know what you settlement will cost you at tax time.
- Not dealing with joint finances and accounts. One of the most common complaints I hear from readers is because they failed to untangle themselves financially from their spouse. It isn’t uncommon for a divorce settlement to state that one spouse is to pay off or refinance an automobile.
What people fail to understand is, if that spouse defies the court order and doesn’t refinance or continue making payments on property in the other spouse’s name there is no legal recourse. You can take an ex back to court for contempt but all you get is another order that the car be paid off or refinanced. If a court order didn’t work the first time, it won’t work the second time.
Before or during the divorce process you need to protect yourself by getting your spouse’s name off any joint accounts. If you own a home or hold any joint accounts together make sure that, such accounts are separated. If your spouse refuses to make payments, then at least you can’t be held responsible.