Even when a marriage ends amicably, it is not unusual for the divorcing couple to argue through a couple of issues. Division of marital assets tends to be one of the most contentious issues during the divorce.
However, since divorce is often a strenuous and difficult undertaking, it is not unusual for some couples to want to hurry it along so they can move on. In so doing, they may end up making decisions or concessions during the negotiations that affect their lives for years to come. If you are in the process of dissolving your marriage, it is important that you avoid these financial mistakes during the divorce.
Overlooking marital debt
It is natural to want your fair share of marital assets. But what about the marital debts? In the eyes of the court, any debt acquired in marriage is considered marital debt even if it was procured by the other party. During debt division, the court will direct that the debt in question be divided fairly. However, it is important to understand that the court will only address the debt that is brought to its attention.
Failing to adjust your lifestyle
While married, chances are you shared bills. However, after divorce, it is important to understand that you are on your own, with no one to share financial responsibilities with. It is important that you adjust your lifestyle so you can live within your means. If you are left with the family home, try to renegotiate the mortgage terms with the mortgage company to avoid falling behind in your payments and running into trouble.
Failing to understand the tax implications of your divorce
During the assets division process, it is important that you understand the tax implications of what you are walking out of the marriage with rather than just focusing on their market value. You may get the family home, but will you afford the annual property tax? As a rule of thumb, ask yourself whether you can truly afford something before fighting for it.
These are some of the financial mistakes you need to be aware of when dividing marital assets. Knowing what mistakes to avoid can help you move forward with a better future.