The stress that comes with divorce can lead people to make poor financial decisions. Some questionable financial decisions are made with the intent to keep money out of a soon-to-be ex’s hands. Other money mistakes are made because of emotion, distraction, or various other factors that affect one’s thought process when their marriage is ending.
Our Arlington divorce lawyers have seen all kinds of financial mistakes clients have made over the years, and we want to highlight some of the more common ones, so you can avoid them in your own divorce.
You may have a deep emotional connection to your home, or you may want to stay there because of its location. Before you fight hard to keep the house, make sure you’ll be able to afford it without the contributions of your spouse. Will you be able to cover the mortgage, taxes, insurance, and maintenance costs on your own? Think carefully about it, and ask a financial professional for their opinion if you need to.
Don’t fall into the trap of thinking you can hide things during the divorce process. Your financial life will be examined, and judges can punish you if they find out you hid assets from your spouse or failed to disclose any debts you took on without your spouse’s knowledge. All assets and debts need to be disclosed and accounted for so they can be allocated during the property division phase of the divorce.
You probably have insurance policies, retirement accounts, or estate planning documents that list your spouse as a beneficiary. These beneficiary designations do not automatically change when you get a divorce. You need to update the designations to name someone other than your spouse, otherwise your spouse could end up receiving benefits you no longer want to them to get.
Before agreeing to a property settlement, be sure you know the true value of your assets. Each spouse should get an independent appraiser to put a value on major items, such as real estate, business assets, art, cars, jewelry, and antiques.
After divorce, most people need to change their financial habits, and that can be hard. We recommend working with a financial planner to help establish new financial goals. It’s essential to create a workable, realistic framework for how you should approach money in your post-divorce life.
After decades of divorce and family law experience, the attorneys of Schneider Law Firm in Arlington can help you avoid the financial pitfalls too many people fall into before, during, and after divorce. We want to make sure you have a strong financial foundation as you begin your new life.