Be sure to avoid these three common divorce mistakes
This article looks at three common mistakes divorcing spouses make when dividing property.
For those going through a divorce, deciding how to divide their marital assets can be a difficult and time consuming task. However, property division is a central aspect to most divorces and ensuring that assets have been divided fairly can help ensure a newly divorced person is better prepared to face the future. Because property division can be so complicated, however, it is an area of divorce law where people are prone to make mistakes. Below are three of the most common mistakes that divorcing spouses tend to make when negotiating how to divide their marital estate.
1. House poor
A couple’s home tends to attract a lot of consternation during divorce negotiations. The problem is that the marital home is not just a significant asset, it also has plenty of emotions attached to it. One or both spouses may try to hold onto the home, even if it’s not in his or her best interests to do so. As the Wall Street Journal points out, it can be difficult for some people to let go of a place that they have invested both so much money and emotion into. A house that was built for two or more people, however, may prove too expensive for one person. Maintenance, upkeep, utilities, and property taxes can all leave the one who “wins” the house struggling financially in the long run.
2. Short-term relief for long-term pain
As USA Today points out, putting an end to a bad marriage as soon as possible can lead to some divorcing spouses agreeing to terms that may not be in their long-term best interests. Although nobody wants to drag out an acrimonious divorce, it’s also important not to give in to any demands that the other party is making just to finalize the divorce as soon as possible. While signing a divorce settlement quickly may bring temporary relief, the long-term financial consequences could be dire.
3. The tax bill
One of those consequences, for example, could be an unexpectedly high tax bill. Understanding how assets are taxed can make the difference between a fair settlement and an unfair one. A settlement that, on paper at least, gives both spouses an equal share of the estate certainly sounds fair, except for the fact that that settlement may leave one spouse having to pay capital gains, property, and other taxes on his or her assets while the other spouse is left with a comparatively small tax bill.
There’s no question that divorce is a difficult process even in the best of circumstances, but making some common mistakes, such as those described above, can make an already difficult divorce much harder than it needs to be. Preparation and good advice are key to ensuring a divorce goes as smoothly as possible. A family law attorney should be one person that anybody going through a divorce reaches out to as soon as possible. An experienced attorney can help clients understand the long-term ramifications of whatever legal decisions they make today and can help negotiate a divorce settlement that is ultimately in the client’s best interests.