Divorce is a process that is fraught with emotions, and one or both spouses are typically hurting. As such, it is easy to make mistakes during the divorce process that you might not necessarily be aware of or recognize. The outcome of your divorce affects your whole future, but especially your future from a financial standpoint.
So today, we thought we would share the top five mistakes to avoid during your divorce. We do this in hopes of preventing you from having regrets and making mistakes that can severely impact your future after your divorce.
1. Not knowing your complete financial situation. This frequent mistake is typically made by wives who leave the family finances to the husband, and have no idea what their total assets, debts, and investment picture looks like.
It’s very important that you are aware of every asset and investment, from life insurance to 401ks and pensions. You should have copies of all your financial documents – bank statements, investment portfolio statements, etc. This will also save you money during the divorce process because your attorney won’t have to track them down if you already have copies.
2. Making unrealistic demands or having unrealistic expectations. Many people start off the divorce process assuming they will get everything they want or trying to be vindictive and wanting to punish their spouse. As such, sometimes demands get exaggerated and this can lead to an extremely painful, drawn-out divorce process. If you want your divorce process to go as smoothly as possible, one of the keys is to have realistic expectations and focus on problem-solving.
3. Letting emotions rule your decisions, rather than logic. I’m sure you already know that making decisions based on your emotions does not lend itself to good decision making. However, since divorce is such an emotionally charged process, many forget this and let emotions rule. We would counsel you to not sweat the small stuff and try to use reason and logic so you don’t undermine your own case. Oftentimes, letting emotions rule is what leads to making unrealistic demands, as we talked about above.
4. Not separating join accounts and joint finances. One way to protect yourself financially during the divorce process is to separate your joint accounts. It’s a tedious process that we know is a grind. Which is why many people don’t do it and end up regretting it. Why is this so important? Well, let’s say your divorce settlement says that your spouse is responsible for paying off your car. If both of your names are on the loan, and he fails to make the payments, you can be held responsible and it can affect your credit.
5. Failing to insist that your spouse acquires insurance to cover spousal support and child support. An important part of your divorce settlement is ensuring that your spouse acquires insurance for any spousal support and/or child support they are responsible for. This is important to you because if your spouse becomes disabled or passes away, your payments will likely cease. However, your spouse can get disability and life insurance policies to ensure payments will continue if your spouse becomes disabled or passes away.
If you have questions about how you should be handling your divorce, please feel free to contact us at714.841.1931 for a free consultation.