Going through a divorce is a painful experience as it is. A person’s whole life and family dynamics change, so, often, finances are the last thing on one’s mind. That’s a big mistake.
Divorce is an expensive process in many ways. Although figuring out your plan and educating yourself on money-related topics can seem overwhelming, it is crucial to protect yourself. We’ve rounded up the most common financial mistakes made during a divorce. Learn from the experience of others!
Fighting for the house
In movies and tv series, divorcees argue about getting ownership of their previous estate. As cliche as it may seem, this is true in real life. You often hear, ‘She got the house, she is set.’ Many forget that a stunning estate typically also includes high-cost maintenance and, in some cases, a big mortgage. Keep that in mind when deciding what to do with the marital home.
Of course, the idea of losing a home that is filled with family memories can seem painful, but you have to be realistic. Perhaps it is not beneficial for you to keep it.
Forgetting about taxes
As the famous quote says, “In this world, nothing is certain except death and taxes.” When you are going through a divorce, your whole tax situation will shift too. There are plenty of aspects to consider – from claiming dependents to understanding the effects of your alimony. Our tip is to get in touch with a financial planner or accountant who can help you find the best way to move forward.
Keeping joint accounts
Once you decide to separate, opening your bank account and saying goodbye to joint credit cards is important. Otherwise, your spouse will still have access to your money, which means they can also check on it whenever they please. Remember that you can be liable for joint debts even if you aren’t married. Protect yourself from these potentially unpleasant situations.
At the same time – it’s not a good idea to take out all of the parties’ joint money. The court won’t be too fond of this.
Being unaware of your finances
It is not unusual for someone in the household not to be aware of the finances. When dealing with a divorce, that can become a problem. You should be fully informed about all assets and liabilities. Start by determining out what income you and your ex receive from all sources. It is also important to check what your fixed and discretionary expenses are.
Educating yourself about marital assets can seem boring and even complicated, but it is critical to protect your rights. Otherwise, you are giving your ex-partner a major advantage, which may not end well for you.
Navigating a divorce isn’t easy. That is why choosing a divorce attorney that will serve your best interests is so important. If you need professional help and advice on making proper financial decisions through such family situations, reach out to our team at Mikhailitchenko Law Office.