Financial Mistakes to Avoid in Divorce
When it comes to divorce, it is imperative that you make wise financial decisions. Hopefully you have read our blog titled “Don’t be in the Dark about Finances in Divorce” for some of the more common tips. This blog will discuss some of the other mistakes you will want to avoid.
It is important for you and your spouse to work together when it comes to dealing with the Internal Revenue Service (IRS). You are both obligated to pay the taxes that are due from audits on joint tax returns, so it is in your best interests to work together and reduce any liabilities as much as possible. If you have complex tax issues involved in your divorce, it is imperative that you confer with a knowledgeable divorce attorney.
Also, when it comes to taxes, you must consider the value of any investments on an after-tax basis. Simply splitting investments 50/50 is not always a fair settlement. Thus, you should confer with a professional regarding the impact of your property division agreement before you consent to it.
When you create the budget that will be used to calculate temporary alimony payments, make sure you do not underestimate your basic living expenses. It is a common mistake and many individuals later discover that they are unable to afford all of their bills. Thus, it is usually necessary to have a lawyer assist you with creating an accurate and comprehensive initial budget.
One of the most difficult obstacles during divorce is your emotions. For example, you may be emotionally attached to the marital home, but it may not be a wise financial decision for you to keep it. This is particularly true if you keep the home at the expense of your retirement planning. Additionally, using your attorney to fight your battles can be expensive. Thus, it is important to remember that your lawyer is not your therapist and you can save a significant amount of money by limiting your discussions with him regarding the emotional aspect of your divorce. Use your attorney to handle the legal side of your divorce and talk through the emotional aspects with friends, family or a licensed therapist.
Finally, you must establish a post-divorce financial plan. Having two households will cost you and your spouse significantly more, so make sure your divorce settlement is realistic and can be manageable for a long time.
If you are facing divorce or you have other family law needs, our legal team is here to help. Contact the Men’s Divorce Law Firm to schedule a consultation with a caring professional, and aggressive advocate for men’s rights in divorce, child timesharing (custody), and paternity matters.