During your marriage, you and your ex more than likely have funds and budgets together. These are sound marital practices, but divorce puts you in a position that requires an in-depth review of the income, expenses, and assets that you and your ex brought to the marriage and forces you to make essential decisions with lasting implications.
Too often, people underestimate just how complicated these issues can be and how important it is to make the right choices. Your best plan of action is to be informed, don’t rush the process, be practical, not emotional, and consider the future when you get your divorce finances together.
Here are a few things to avoid when going through the divorce process.
- Not understanding your marital finances. The first step in reaching a fair financial outcome in your divorce is establishing where you and your ex-spouse stand. Establishing this requires you to review both your incomes and expenses carefully. You should evaluate all sources of income that your ex and you have, from your salary to investments and benefit plans. It will give you an idea of what your exact divorce finances.
- Underestimating your monthly spending. You must figure out what you spend monthly and what your cost of living will be once you finalize your divorce. Ensure your monthly spending is estimated appropriately and that your budget is reasonable enough for your current standard of living. You will need to factor in future inflation (a common mistake), future costs, and insurance. Your budget will become the starting point for determining alimony. This calculation needs to be correct because, if not, you run the risk of underestimating your future needs.
- Keeping the family home when you can’t afford to. A house is more than another asset; it’s an intimate place with a priceless emotional value. However, you need to be realistic and protect yourself from future financial trouble when settling a divorce. Unfortunately, this means making tough decisions, like admitting you cannot afford the home. If you ignore the numbers and attempt to hold on, you could find yourself struggling under the weight of the mortgage, maintenance, and property tax costs.
- Not understanding your responsibility to pay the marital debt. In most cases, if there is debt acquired during your marriage, it is a shared responsibility. Dividing marital debts is part of the divorce process, but debtors often do not listen to the arrangements you and your ex made. Unexpected debts like this could cause complications and sudden stress in your divorce finances if you are unaware of your responsibility, or if your ex accepts responsibility yet fails to keep up.
- Choosing the wrong attorney. Your divorce is already stressful and time-consuming, especially when figuring out your divorce finances. An aggressive lawyer may frustrate your ex, which can cause negotiations to turn hostile. Additionally, an attorney that instigates a fight runs the risk of squandering your share of the marital estate. It is best to find an attorney that will advocate for your best interest in a professional way, which means leaving emotion out of it.
There is certainly a lot to consider, and it can be overwhelming. But taking the time to be informed and find all the circumstances with the knowledge of your current situation can help you avoid these divorce finance mistakes. Remember, try to act from logic and consider finding trustworthy, qualified financial professionals for the best possible outcome. Our attorneys will advocate passionately on your behalf. Give our Chandler office a call today at (480) 470-3030.