5 Financial Mistakes You Should Avoid During Divorce

 Posted on July 05, 2018 in Divorce

One of the most common things people worry about when they are going through a divorce is how it will affect their finances, and for good reason. According to a study conducted by the U.S. Government Accountability Office, women experienced a significant drop in their income after divorce--nearly 41 percent, on average. This can be due to a number of factors, but there are dozens of mistakes you can make when getting a divorce that could negatively impact your finances. Here are some common mistakes you should be sure to avoid:

1. Not Being Prepared

One of the most common mistakes that people make with their finances during divorce is not being prepared for the divorce itself. Divorce is a long and demanding process, so being prepared is crucial. Before you begin the process, you should consult with both financial experts and an experienced attorney to make sure you are making the best decisions.

2. Not Having Sufficient Records

Dredging up old documents can be a pain, but it might also be able to save you financially. Having copies of your tax returns, bank and brokerage accounts, wills and trusts, insurance policies and inventories, vehicle titles and registrations, and any other financial or legal documents can prove that your budget is truthful and your claims to ownership of assets are legitimate.

3. Not Being Informed About Your Assets

You should know exactly what assets you own and what you are entitled to. You should also know the difference between marital and non-marital property, or what is and is not up for grabs. Remember that pensions, stock options, retirement accounts, and life insurance are all marital assets--do not overlook them. Even if you do not want a certain asset, it can be used to bargain for assets that you do want.

4. Forgetting About Shared Debts

In the excitement and scramble to fight for ownership of assets during a divorce, many people forget to consider the debts that they might share with their spouse. These have to be divided too. Though they are not as desirable as assets, liabilities must be factored into the equation when you are dividing things, and it is important to make sure that your credit score does not take a hit.

5. Not Getting Help From an Experienced Schaumburg Divorce Lawyer

Perhaps one of the most critical mistakes that you could make in a divorce is not getting representation from a skilled and knowledgeable Rolling Meadows divorce attorney. You should contact A. Traub & Associates to discuss your specific situation and discover how you can protect your finances as much as possible during your divorce. Call our office at 630-426-0196 to set up an initial consultation.

Sources

https://www.gao.gov/products/GAO-12-699

https://www.wife.org/12-financial-pitfalls-of-divorce.htm

https://www.forbes.com/sites/jefflanders/2012/11/27/three-types-of-financial-mistakes-divorcing-women-make-and-how-to-avoid-them/#5d59bf742b68