There are many people going through a divorce who experience a combination of monetary and emotional concerns. Fortunately, there are ways in which they can minimize the former by taking a hands-on approach towards organizing their finances. Once a married couple decides to part ways, each party requires hiring a divorce attorney. While there are many attorneys who don’t charge an initial consultation fee, there are some others who charge clients in the beginning of the process. Apart from the initial consultation fees of the divorce attorney, there are hundreds of other financial areas that the couple needs to take into account. In case you’re unfortunate enough to part ways with your partner, you should have a look at some of the crucial mistakes that couples often make. Check them out.
- Being a financial victim: In case you suspect that your spouse is planning a divorce, make copies of all the important financial records such as bank account statements and all other data that relates to your marital lifestyle, like checking accounts, charge cards, statements and tax returns. If you believe that your spouse may even retitle marital assets, make sure you notify the holder in writing and also get a restraining order from the court. Watch out for cash in joint checking, joint credit cards, brokerage accounts or cash value of life insurance.
- Not considering collaborative divorce: If all assets are moderate, joint custody may be a feasible and workable option and your spouse is also agreeable to a fair settlement, mediation or collaborative divorce. This also saves thousands of dollars in legal fees, provides more flexibility than the adversarial legal process and helps in emotional aggravation.
- Hiring a combative lawyer to punish your partner: This is indeed a very bad idea for many reasons. Firstly, except in extremely atrocious cases, divorce settlements are determined by equal distribution laws and the court is not supposed to punish your spouse for being a bad human being. Secondly, you attorney assumes carte blanche to increase the hours that you spent on your case. High divorce cost means less money be left for your living. Always treat divorce as a business arrangement.
- Failing to recognize the IRS: Work together with a divorce financial planner or tax accountant to minimize the total taxes that you and your ex-spouse will pay during the separation and post divorce and then share the money that you save. Don’t forget that both parties are liable for taxes due as a result of joint returns and audits.
- Not producing an accurate budget: Invariably, the clients underestimate expenses when they offer their initial budget for temporary maintenance and later during the process of divorce they complain about not being unable to pay their bills. You should therefore use a financial professional to help produce an accurate budget.
Therefore, if you’re in for a separation, make sure you avoid committing the above mentioned mistakes. Talk to a dependable lawyer and stay on top of your assets and finances.