A divorce is an incredibly stressful time in an individual’s life. It can also be an incredibly expensive time in one’s life as well if you make poor financial decisions.
During your divorce, you will be faced with many decisions that will immediately or in the long run, affect your financial security. Many financial decisions you can make on your own, but there are those decisions that you will need to seek financial advice from a qualified professional.
The most common financial mistakes made by divorcing couples are the following:
- Ignoring or underestimating your expenses: The majority of people know how much they make each month, but really do not know how much they spend each month. Write down every current expense, develop a realistic budget, and then consider the cost of your future living expenses.
- Believing that the parent with more custodial time should keep the family home: No matter how attached you are to the family home, staying in the home may not be the best move financially.
- Assuming that an equal division is a fair division of property: An asset’s value may not be defined or limited to its current market value. Compare apples to apples when you trade assets in a divorce negotiation.
- Deciding financial issues one at a time: When you look at an asset or source of income separately, you miss the interaction of such items as taxes, capital gains, investment losses, timing issues, inflation, etc. You need to look at a comprehensive picture of all your finances to better understand how each financial decision you make may affect another decision, and determine how and when to divide assets.
- Failing to secure spousal support and child support payments with insurance: Request that your spouse obtain both disability and life insurance policies to ensure these payments will continue in the event of his death or disability.
Divorce is a difficult, stressful process, a process that will change your life. When you are contemplating divorce, speak with an experienced Florida family law attorney. An experienced attorney can explain the options available to you, can assist in protecting your interests, and help you through this emotional time in your life.
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