Divorce can be an extremely emotional experience not only for the couple ending their marriage but for their families and close friends. However, it’s essential to contain those feelings and focus on the future.
The distribution of marital assets and child custody arrangements are typically the most critical issues divorcing spouses face. One or both parties can often let their emotions get the best of them, leading to errors that can result in long-lasting consequences.
Prevent mistakes that often bring financial repercussions
The goal for you and your attorney is to secure the best possible outcome for your personal, physical and financial well-being. However, these common errors can compromise a favorable result:
Oversharing on social media: Bragging about a great new life or trashing a soon-to-be-ex spouse can complicate negotiations.
Failing to get necessary paperwork: Gather as much financial information as possible while you still have access because an ex may be unwilling to provide it later on. This includes:
- Balances and numbers for all financial accounts
- Amounts paid for real estate and other major assets
- Receipts showing payments for home improvements
- Social Security statements showing a spouse’s earnings record and expected future benefits
Overlooking tax consequences: Understanding how marital assets are taxed is crucial to receiving a fair outcome when those assets are divided, such as:
- Investments – knowing the difference between a Roth IRA and a traditional IRA
- Property – potential capital gains ramifications for selling a family home
- Support payments – effects of the new tax law regarding alimony
Failing to close joint accounts: If your name is on an account, you are responsible for the debt. Close all joint accounts and remove yourself or your ex from credit cards and loans.
Resigning yourself to a court battle: Mediation or collaborative divorce can drastically cut costs compared to traditional divorce proceedings resulting in litigation.
Think of divorce as a business transaction
While it can be challenging to set aside the intense emotions that a divorce creates, focusing on the business side of the process is crucial for your financial well-being. An experienced family law attorney can help you determine how to achieve the best possible outcome, whether it’s through negotiation or litigation.