One of the most important aspects of a divorce is figuring out what will occur with the couple’s finances. Your financial life will change completely after you begin the divorce proceedings, which is why you should have a good idea about your financial future before you move ahead with a divorce. People make big financial mistakes all of the time when they are getting divorced. We want you to avoid those mistakes at all costs, which is why we’ve prepared the following article to give you some great information. Below, you will learn about 4 financially risky divorce mistakes to avoid at all costs. If you need help figuring out the best course of action for your divorce, reach out to the Johnson Law Firm & Associates today.
1. Seeking Revenge
Things can get heated easily in a divorce. If one person feels like they aren’t getting treated fairly or wants to seek revenge on their spouse for something that has occurred in the relationship, it can dramatically impact the couple’s finances. Contesting every issue in a divorce is one way that people try to seek revenge during a divorce. This can end up costing thousands of dollars in legal fees and make the entire process take longer. It’s best to keep a cool head during your divorce so that you are always making rational and financially savvy decisions.
2. Not Considering Real Costs
Lots of couples make the mistake of thinking that the current value of their investments is what they should use. This is a big financial mistake because they aren’t considering the real value of those assets. For example, liquidating investments and real estate can end up costing a lot of money in capital gains taxes. Cashing in on retirement accounts can also lead to big financial penalties. One of the most financially risky divorce mistakes you can make is not considering the real costs of liquidating your assets.
3. Focusing on the House
One of the biggest assets that need to be dealt with during a divorce is the house. If you and your spouse were living together in a house, you probably want to do everything you can to continue living there. However, it’s important for you both to consider the monthly mortgage payment, property taxes, utilities, and more when you are trying to figure out the best course of action financially. Remember that if you sell your house, you will have a significant tax liability to deal with as well. This highlights the idea that having a great divorce attorney to provide information about the financial impacts of divorce can be so helpful.
4. Not Looking at the Big Picture
Another financially risky mistake to avoid during your divorce is not looking at the big picture. You should consider things like tax requirements, debt payments, retirement planning, child support, alimony, and any other potential financial obligations. It’s common for a couple to only focus on custody of children and getting the divorce over with. Make sure you are considering the big picture to avoid making any huge financial mistakes.