Getting a divorce will impact your finances. Unfortunately, many couples going through divorce don’t focus enough on the financial implications of divorce and find themselves in financial trouble in the future.
Many couples find themselves regretting their actions during their divorce proceedings, especially regarding their finances. Most say that they just wanted the divorce process to be over and they didn’t make all of the financial considerations they should have.
The divorce settlement process involves several aspects and some of them can be considerably complicated or difficult to understand. The divorce settlement is also a legal document that is finalized, making it even more important for divorcing couples to make sure the divorce settlement is accurate and addresses all of their concerns.
Despite the financial considerations often recommended by divorce attorneys, many people still end up making financial mistakes in their divorce settlement. Below is a list of the most common financial mistakes made during divorce and what to do instead:
- Get your own divorce attorney: this is one of the most common mistakes. Couples really benefit from consulting their own divorce attorneys during settlement negotiations. Having your own attorney that will work and advise you of your best interests will help you not regret your financial decisions after the divorce has been finalized.
- Understand the difference between alimony and child support: many people get these confused and may not be making the right claims during tax season. Child support is not tax deductible but alimony or spousal support is. Consult with an attorney to discuss how this will impact your taxes.
- Don’t lie during divorce proceedings: one of the biggest mistakes is lying about assets, the children or why you are getting divorce. Lying could set a bad precedent with the judge and impact the divorce settlement.
- Review prenuptial agreement: this is very important because it will help determine what will need to be divided and what has already been pre-determined.
Source: Fox Business, “Divorce Attorney Share their Tips to Avoid Financial Mistakes When Splitting Up,” Kate Rogers, Feb. 19, 2013