Top Financial Mistakes That You Should Avoid When Going Through a Divorce
When you are beginning the process of a divorce, it’s understandable that the shock of separating from your partner can mean that it’s difficult to keep a clear head. However, when you are beginning the process of going through the legalities of divorce, there are a few common mistakes that it is useful to be aware of.
- Attempting to handle your own divorce
This is a common one because many divorcing couples believe that it will be beneficial for them to be able to save money. However, attempting to handle your own divorce proceedings can often result in mistakes being made and one member of the couple conceding to more than they were actually happy with. This can lead to problems further down the line, so having impartial assistance is important in the first instance.
- Not Considering Retirement Assets Further Down the Line
While many spouses may each have their own retirement funds, there may be a significant difference in the amounts that are in the accounts. A qualified domestic relations order (QRDO) allows retirement plan assets to be divided fairly in a divorce with neither the account holder nor the recipient incurring early withdrawal penalties when receiving the money before age 59 ½. If dividing retirement assets seems overly complicated, then you can ask a certified accountant (CPA) about the long-term financial consequences before you make any final agreements with your partner.
- Having an unfair amount of marital debt placed on you
Hopefully, it is something that will have been transparent during your marriage, but if you or your partner have any outstanding debts, then you will want to ensure that they are dealt with in a reasonable way. Getting saddled with debt that is not yours is very difficult to deal with, so you will want to ensure that this is rectified when you are going through a divorce.
- Refusing to try Mediation or Arbitration
While it is understandable that you may be angry and want to avoid your partner as much as possible, it can be beneficial to attempt to find common ground. It can involve a lot of time, expense, and stress to go through the court process, so getting a professional to help both parties can avoid this.
- Under or over-valuing your marital assets
It can be complicated to fully understand the value of property or business assets during the course of a marriage, so it is important that both spouses get their individual assets valued to fully understand what they have to divide.
- Rushing through the process
Whilst it is understandable that you will want to try and move on as quickly as possible, rushing the process and trying to do it all yourself can end in a number of different mistakes. Take it at a reasonable pace and enlist the help of a legal professional.
Being able to financially protect yourself as much as possible in a divorce is important, and there are a number of things that you should consider when you are going through the process.
If you are about to start the process of a divorce and need support, get in touch with one of our expert solicitors today.
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All advice is correct at time of publication.