When you file for divorce, prepare yourself to deal with the division of assets and debts. You will also need to consider child custody and alimony. All these financial aspects of a divorce can sometimes be overwhelming, and you are likely to make mistakes that will cost you in the future. Consult your divorce lawyer to help you avoid these financial mistakes.
Not Knowing All the Assets
Not knowing about your marital assets is a costly mistake. A spouse who dealt with all the finances during the marriage has an edge over the spouse who did not. You must be aware of everything you owned as a couple.
You need to understand the value, tax aspects, and location of your marital assets and debts. Property includes real estate, bank accounts, social security, and future pensions. Also be aware of student loans, mortgages, credit lines, business loans, and retirement plan debts. Your divorce attorney may advise you to hire a CDFA (Certified Divorce Financial Analyst) to ensure that you know and understand the implications of all your assets and debts.
Keeping a House You Cannot Afford
Deciding who takes the marital home is usually a difficult choice. Many spouses consider the marital home convenient for the stability of their kids. However, sometimes, keeping the marital home will lead to ongoing expenses.
Before you choose to keep the house, create a list of your housing expenses. These include property taxes, mortgage payments, utilities, maintenance costs, and homeowner's insurance. Taking this inventory will help you determine whether you can afford to live in the house. Brainstorm with your divorce lawyer to ensure you make the right decision.
Failing to Secure Child Support and Alimony
Negotiating child support and alimony can be a daunting task. However, the most significant hurdle in a divorce is securing that income. It is advisable to use a life insurance policy to ensure all support obligations are paid in all situations.
For example, if you have been receiving support and alimony and your ex-spouse dies in three years, that source of income dies with them if you do not have life insurance. Your divorce attorney should ensure that you get a significant life insurance policy as part of the divorce settlement to cover all financial plans.
The financial aspect of a divorce can be tricky. You should consult widely before making any financial decisions. Many divorcees get the short end of the stick by making rash decisions. Consult your divorce lawyer and let them help you go through all the financial elements of your divorce before making any settlements.
For more information about the financial aspects of divorce, contact a divorce attorney near you.