No one plans to go through divorce, but most people can agree that if they have to they would rather have it be a pleasant (or as pleasant as possible given the nature of the beast) experience. However, sometimes both parties best efforts to be nice can lead to costly mistakes and problems for the future.
Even in an amicable divorce, financial mistakes can be made by either or both parties. In fact, experts say financial mistakes often occur precisely because both parties are trying to be friendly. “The undercurrent of being amicable masks the cold reality that your spouse is not in the position to protect or promote your interests,” says John Mayoue, an attorney who has represented high-profile clients including Jane Fonda and Marianne Gingrich.
“People seeking amicable divorces often come into these very naive,” says Mayoue, the author of several books about divorce with titles like “Protecting Your Assets from a Georgia Divorce.”
Many divorcing couples make poor financial decisions because they don’t want to rock the boat, say experts, and they gloss over details, only to be tripped up later. So if you’re striving for an amicable ending, here are three common financial mistakes divorcing couples tend to make.
Keeping the House
Even in the current housing market, it may not be the best idea. “I see that a lot, wives staying in the family home for the good of the children,” says Laurie Blazek, a certified divorce financial analyst based in Chicago. “They’ll take that asset and give up cash or liquid assets in exchange for equity, but nobody’s looked at the numbers to see if they can afford to stay in the home.”
Not having the entire financial picture
For instance, who gets to deduct the children when the couple files their taxes separately? “The number one thing I see is that people don’t get adequately informed regarding their financial family’s worth,” Mayoue says.
Sometimes that’s due to fear. Spouses hesitate to ask their once significant other for paperwork on retirement accounts or estate planning documents. “They’re afraid they might upset them if we ask them to prove what they’re saying,” says Mayoue.
Keep the nice spirit, but keep your eyes open
The model behavior for divorcing couples is to talk about your finances not only during, but after the divorce, says Howard Markman, a psychology professor and co-director of the Center for Marital and Family Studies at the University of Denver.
“Too many couples don’t express as clearly as they can to each other how they feel about their financial situations. But it can be a double-edged sword,” he says. “Money is the biggest thing that couples fight about in the first place.”
Being nice is important, but it is also important to look out for yourself and your family. Be aware of what you need and what your situation may be because following the divorce.