When it comes to divorce, there are a lot of common mistakes that can lead to big problems. Thankfully these mistakes generally fall into one of two categories. Once you know about these categories, you can take steps to avoid falling into the same traps.
So, let’s dive in.
Mistake category #1: Financial
Not surprisingly, the biggest mistakes often involve the financial. You may want to keep the family home or business interests and are willing to give up way too much to make sure you get that one asset you are set on keeping. Take a second to put together a budget with expected expenses before you determine how to split the property.
It is also important to keep in mind that a 50/50 split is not as simple as one person getting exactly half of the assets. Some assets, like bank accounts, are more liquid than others and easier to use for immediate expenses while others, like retirement assets, accumulate more over time and will end up having a much larger value than they do during the divorce. It is generally a good idea to get a mix of assets to better ensure future financial stability. Get the right mix tailored to your specific situation.
Another important financial consideration those going through a divorce often forget to consider are taxes. Although the Internal Revenue Service (IRS) generally does not tax assets transferred during the divorce, they will likely tax the sale of certain assets once the divorce is finalized. It can make more sense to sell assets before finalizing the divorce and split the bill. If children are present, you will also need to decide which parent gets to claim the children as dependents.
Mistake category #2: Emotional
It is tempting to accept the first settlement offer and move on, but this is not always the best choice. Review the proposal and continue negotiations if it does not protect your interests or meet your needs.
Moving on is important and often difficult. Counseling and coaching options can help provide emotional tools to help with this process.
It is also important to note that you do not have to go through this process on your own. You can get a team to help better ensure your interests are protected throughout the divorce process. A financial expert and legal professional can advocate for your interests to help make sure you have as smooth of a transition as possible into your post-divorce life.
