Settling a divorce already causes enough stress between the emotions involved, finding the right lawyer for you, and trying to come to an agreement with your spouse. There are several financial mistakes that individuals make during this process. If you weren’t very involved in the finances during your marriage, it’s likely that your spouse will have the upper hand. This will work as an advantage for your spouse, so it is important to get as much information as you can.
If you think a divorce is going to happen or it is already in the process of happening, you are going to want to make copies of any and all important financial documents. This may include information from savings, brokerage, retirement, checking accounts, charge card statements, tax returns, etc.
If you believe that your spouse might sell or transfer to cash any assets or re-title marital assets without consent, notify the holder of the asset or property in writing. You will want to get a restraining order from court. You will want to watch out for any cash held in joint checking accounts. If you notice that a spouse is using or moving assets without your knowledge, you will want to hire a legal or forensic expert.
It really becomes a lot more difficult to settle a divorce when the two individuals involved do not see eye to eye and cannot come to terms on anything. If you and your spouse can work together to reach a fair settlement on majority of the issues involved in the divorce, then choosing mediation can save you thousands of dollars in legal fees. A neutral third-party mediator will meet with the couple to help you reach an agreement on topics such as child custody, child support, alimony, and property division. This provides a lot of flexibility rather than the typical court trial where the judge makes all of the decisions.
A combative lawyer is not a good idea when trying to settle a divorce for most cases. This is used as a way to try to punish your spouse. The court won’t financially punish your spouse just because they have done bad things. In cases like these, your lawyer will need to spend a lot of time on your case. This will be extremely costly The higher the divorce cost, the fewer assets left after settlement.
You are going to want to work with a financial planner or a tax accountant in order to minimize taxes that you and your spouse will have to pay during the separation. Both spouses will be liable for taxes due to audits on joint returns. You will definitely want to consult with someone who has experience.
Couples usually do not properly estimate how much it will cost them to live alone and be financially independent. They often will underestimate this, and be left unable to cover all of their bills. Using a professional to produce an accurate budget will save you money in the long run.
Once the divorce is final, you may get taxed on the marital assets you received from the settlement. You will want to determine the value of your investments after-tax before agreeing with your spouse on the division.
If your spouse proposes a settlement, you will want to make sure that this is fair before agreeing. Your main focus should be on how this settlement will impact your finances in the future. There are so many aspects you will need to consider such as assets, incomes, living expenses, inflation, alimony, child support, taxes, investments, retirement plans, child-related costs, and more. The key is to always be focused on what will happen to you after the divorce is all settled.
During a divorce settlement, a family might get attached to the possessions that they have accumulated in the home, yet do not realize that they can’t afford it. The individuals might fight to keep these in expense of retirement planning. Due to the real estate market crash, more and more couples have had to walk away from their homes and hard-earned money they invested into it. All your other expenses will help you to let go of the emotional attachments you have to certain possessions. Not letting go of these will cost you. You should always be thinking of your finances in the future.
Divorce lawyers can be very costly. Depending on what law firm you choose, prices can vary. Many people might have the tendency to overuse their lawyer. It could even lead to individuals expressing to much of their emotions when it comes to the divorce. If you need to talk about this aspect of the divorce, make sure you are discussing it with a medical professional, and not your lawyer.
A divorce settlement means that both parties involved are going to have to make compromises along the way. If a settlement offer looks too good to be true, then it probably is. A family law attorney can review an offer to you in order to make sure your rights are protected.
Besides this, there are several other factors that you will want to consider. The most important thing that you can do to avoid financial struggling after marriage, is to develop a post-divorce financial plan. Two households are more costly than one. When you make a post-divorce plan, you have to understand that this is going to be this way for many years. You will want to develop goals and realistic expectations.
Contact Palacios for expert advise in family law and divorce today!