People may make mistakes during the divorce process that can negatively impact their finances. With the right guidance and perspective, it is possible to avoid common mistakes that people make. Seeking support from professionals during the divorce process can help create a more financially stable future.
The following common mistakes can cause lasting financial complications for divorcing spouses and should be avoided when possible.
Letting emotions run the show
Experiencing divorce can be an emotional experience for both people in the relationship. Strong emotions can make it difficult when it comes time to make important decisions for the future. Sometimes the emotional impacts of divorce can lead to fighting over small or unnecessary issues, which can lead to long-term negative impacts, including increased litigation costs, unwise negotiations and emotional scars that cannot be healed. When possible, it is best for a person going through a divorce to focus on practical needs and take the time to figure out what their priorities are. If struggling with the emotional impacts of divorce, seeking support from friends, family or a mental health professional to help work through the emotional aspects of the divorce process may be helpful. While divorce is an emotional issue, treating things like equitable distribution as a business decision is helpful.
Fighting to keep the marital home
When setting goals for a divorce, it is important to consider the practical implications of achieving those goals If a person decides that staying in the marital home is the best option, they will need to consider important factors such as how expensive it is to maintain and repair the property and pay for the various bills associated with the home. Before choosing to fight to keep the marital home, it is paramount to consider all the potential long-term impacts. There may be an emotional tie to the house, but the more important question is whether it is affordable or practical to maintain the house, or will keeping the house create a new host of problems?
Using outdated or inappropriate values for key assets
Knowing what individual assets are worth is a key component of negotiating a fair property division settlement during a divorce. Spouses have to agree on a value or convince the courts of fair market values to effectively allocate assets. For example, agreeing to use the initial purchase price for a home instead of what the house would currently sell for might deprive one spouse of tens of thousands of dollars in equity because of the increased fair market value of that asset. Collections, vehicles, businesses and investments may require professional valuation. Correctly identifying assets and using appropriate values for these assets will help to ensure that the division of said assets will be equitable.
Making concessions to keep the peace
Instead of fighting unnecessarily over every decision, some people make the mistake of avoiding conflict at all costs. They make concession after concession, giving up their interest in numerous assets to move the process along as quickly as possible. While compromising and being cooperative are both positive during divorce proceedings, spouses also need to consider the long-term implications of their choices.
Failing to review financial records
People might take too much for granted as they prepare for divorce. They might assume that their spouse was honest when making financial disclosures, or they might not notice the warning signs of dissipation or wasteful conduct involving marital property. If this occurs, thoroughly reviewing financial records and/or hiring a professional, such as a forensic accountant, can help to determine if financial misconduct has occurred.
Understanding that “equitable” does not always mean “equal”
In divorce, there are several factors that a court will consider when dividing up marital assets, including separate property contributions, the needs of the parties, and if there was wasteful dissipation of assets or unfair transfers of assets, among several other factors. One party may be entitled to more of one asset than another. Without proper guidance, a person could end up with an inequitable resolution, even though the division was considered “equal.”
Those preparing for property division proceedings may need guidance if they hope to secure a fair outcome, and that’s okay. It’s easy to make missteps during the divorce process. Seeking support can help. The attorneys at Donnellan Law, PLLC, are experienced divorce litigators who can help manage the financial questions and ambiguities one might experience during a divorce proceeding. For a consultation on your divorce matter, please contact Donnellan Law, PLLC, at 518-602-3820.