Avoid These Financial Mistakes During Your Divorce
Legally ending a marriage is a major life event that tends to come with a lot of upheaval, both emotionally and financially. Navigating the financial landscape of divorce can be especially difficult, as there are specific laws and regulations that govern financial matters, like how a couple must divide their assets or whether one party must pay alimony to the other. Making mistakes when it comes to implementing and interpreting these laws during the divorce process can result in long-term repercussions that affect a couple’s financial stability for years to come. Read on to learn more about the kinds of finance-related mistakes you should avoid making during your own divorce.
Making Rash Decisions
One of the most common mistakes that couples make during divorce is to make rash financial decisions that are driven not by reason and careful planning, but by emotion. The urge to get rid of an asset quickly, for instance, or to agree to unfavorable terms just to be done with an unpleasant process can lead to financial hardship down the road. Fortunately, it is possible to avoid these kinds of errors by working with an experienced attorney who can guide couples through the more complex aspects of asset division, while also helping ensure that they don’t make decisions based purely on emotion.
Forgetting About Taxes
Many couples forget that getting divorced has significant tax implications, affecting everything from a person’s filing status to which kinds of credits and deductions he or she can qualify for or claim. Failing to take these consequences into account during the settlement process can lead to financial strain later on, so it’s important to work with a tax professional during the divorce process who can help couples avoid these kinds of costly errors.
Failing to Account for Valuable Assets
Dividing marital assets often ends up being one of the more complicated aspects of divorce negotiations. This tends to be particularly true when it comes to certain assets, like investments and ownership interests in a business. Understanding the value of these kinds of major assets and how they fit into Florida’s equitable distribution framework is critical to reaching a fair property settlement. It may, however, be necessary to hire experts, like business valuation specialists or real estate appraisers to obtain an accurate assessment.
Failing to Protect Retirement Assets
Retirement assets often end up being one of a couple’s most valuable financial assets, so missteps when dividing this type of property can have dire consequences, including the loss of valuable benefits and significant tax penalties. This is why it’s so important to work with an attorney who can walk couples through how retirement accounts, like IRAs and 401(k) accounts are treated during a Florida divorce.
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The financial decisions that you and your spouse make during divorce could have repercussions that will affect you for years to come. To ensure that you don’t make a mistake that could end up costing you financial security after your divorce, please reach out to the experienced Clearwater divorce lawyers at Cairns Law today. You can reach us at 727-683-1472 or via online message.
Sources:
forbes.com/sites/davidrae/2018/10/25/divorce-financial-mistakes/
businessinsider.com/personal-finance/financial-mistakes-never-make-during-divorce-2021-2
