Having a Lack of Knowledge About Your Finances
One of the biggest mistakes anyone can make in a divorce is not keeping up with the finances. If one of the spouses has always been in charge of the decisions when it comes to the finances and the other spouses does not have any knowledge of it, that spouse may be at a disadvantage when the time comes to try to agree on a settlement during the divorce. If you believe your spouse is contemplating a divorce, try to get as much information as possible, it is important to make copies of any important documents, like account statements or tax returns. It is also important to keep an eye on all of your account activity to ensure you get a fair settlement.
Ruling Out Mediation
If it is possible for both spouses to work together and they can reach a mutually beneficial agreement between the two, mediation may be the best choice. Mediation can possibly save the divorcing couple a lot of stress and maybe relieve some of the financial obligations that come with a divorce. Normally, during the mediation process, there is a neutral third-party mediator who is trained in family law that sits down with the divorcing spouses to help them reach a settlement. The defining characteristic of mediation is that it is voluntary, the mediator does not act like a judge and the spouses do not have to agree on anything by force. Mediation works the best when the divorcing couple is willing to compromise on some things..
Trying to Punish Your Spouse in the Divorce
If a divorce begins or turns bitter, one of the spouses might try to make the other spouse suffer through the divorce process. For example, trying to make sure the court sees the other spouse as a bad person and trying to reduce their financial settlement simply because of that, which will possibly not work. Seeing as the court usually does not make financial agreements based on behavior alone. Another way is to hire an attorney solely to punish the other spouse. This can be very costly due to the attorney having to work more on your case meaning there will be higher divorce costs, which means that there will be fewer assets for yourself.
Forgetting about the Taxes
It is a good idea to have a financial planner during the divorce process so that they try to minimize the taxes that have to be paid during and after the divorce. It is also important to remember the tax liabilities when settling property. Be hesitant when accepting a settlement that has large capital gains in comparison to the other spouses’. If these issues are not addressed, then your settlement can be subject to a costly tax payment. The only way to know if you’re getting a fair deal is to determine the value of the settlement on an after-tax basis, then decide if you like the deal
Not Thinking about a Proper Budget
It is important to not underestimate the living expenses during the divorce process. Should one of the spouses need maintenance, also known as temporary alimony, then will need to submit an initial budget for their living expenses. If the budget is not taken seriously and the proper amount of maintenance is not awarded, then the receiving spouse will find themselves not able to cover all of their living expenses. In certain cases, it is probably a good idea to find a financial planner to help with the budget.
Not Thoughtfully Evaluating Settlement Proposals
Simply accepting a proposed settlement without considering the impact it will have on your future in the long run is usually not a good idea. To have a settlement that will be the most beneficial to you must take into consideration your income, living expenses, child-related expenses, if applicable, child support, alimony, and assets.
Becoming Emotional During the Divorce Negotiations
When the time comes to try to divide the marital assets, one of the spouses may feel a surge of emotion when talking about dividing assets they believe they worked hard for, such as the house, their pension, or something they feel personally attached to, like a piece of art. This surge of emotion can often impair good judgment, leading the spouse to fight to keep something they can’t really afford, like the house. It is recommended to let go of any emotional attachments you have. Your object during the divorce and settlement negotiations should be to have enough money to cover your living expenses after the divorce.
Thinking of your Attorney as a Counselor
An experienced attorney can also be a bit expensive to hire, but if you want the best deal available to you then it is a good idea. However, it is important to remember that your divorce attorney is not your counselor. During the divorce process you may feel like talking about it to someone or letting go of some grief, you may also find that you spend quite a bit of time talking to your attorney about your case, but remember that your attorney is not the right person to talk to about the emotional aspects of the divorce, much less career counseling. .
Remember: If Something Sounds Too Good To Be True, It Might Be
It is common for the divorced spouses to compromise in their lifestyle after the divorce. To live a good life after divorce a beneficial settlement agreement is needed. However, make sure you verify the number in the proposed settlement and try to get as many payments upfront as possible. Try to ensure your settlement is the best for you without being unfair to the other spouse. If you are getting a huge asset in the settlement, be sure to check the tax liability and the capital gains.
Letting Others Influence You Too Much
While you are going through the divorce, you may get opinions and suggestions from your family and friends, which is not always a bad thing. You may hear stories about other’s going through a divorce, you may get legal advice from people that are not attorneys, and you may even be told how you should be feeling. The important thing to remember is that they are just suggestions and opinions, ultimately you are the one that knows what is best for you.
