Avoid mistakes in divorce that can lead to financial disaster
It is no secret that many couples end their marriages in divorce in the United States. Roughly one in two marriages end in divorce, and separation is much more acceptable that it once was. Even with these realities, actually going through a divorce is never an easy event.
Emotions can cloud one’s judgment and result in an attempt to avoid further conflict. As a result, it may be appealing to rush the process along and hastily agree to a divorce settlement without thoroughly and carefully reviewing it. Unfortunately, rushing a divorce settlement can have a disastrous impact on one’s financial future.
Divorce is not just the end of a romantic relationship; it is also the end of a financial partnership. Those going through a divorce need to keep their financial future in mind and take the time to make sure that their divorce settlement properly reflects their needs.
Tips to financial security during and after divorce
Some steps that can help people going through a divorce to maintain their financial footing include:
- Keeping appraised of all finances
- Keeping a copy of important documents
- Keeping the future in mind
It is important to keep up to date on one’s financial standing. If still in a marriage, try to avoid allowing one spouse to have total control over all finances. If filing for or considering a divorce, take steps to be fully aware of all assets including savings accounts, stocks, business interests and other investments.
It is also helpful to have access to important documents, like tax returns, property deeds and estate plans. If a prenuptial agreement was used, review it and bring a copy with when meeting with a divorce attorney.
In addition, keep the future in mind. Do not attempt to avoid conflict and agree to a divorce settlement without carefully reviewing it. Mistakes can lead to disastrous consequences in the future. If, for example, a divorce settlement includes distribution of a pension, a qualified domestic relations order or QDRO is likely needed. If this document is not included tax penalties may be tied to the distribution of the accounts. Without carefully reviewing the settlement important steps like including a QDRO could be missed.
After the divorce is finalized, confirm that your name is removed from any debts assumed by your ex. If your ex assumed financial responsibility for the family home, make sure your name is off the mortgage.
Navigating through the various laws and considerations required for a fair divorce settlement can be difficult. As a result, if you are considering a divorce or have recently filed divorce paperwork, contact an experienced divorce lawyer to discuss your situation and better ensure your legal rights are protected.