Divorce is emotionally and monetarily expensive enough, but when you add in mistakes it can drive costs well past what is considered acceptable. In today’s blog, we’re going to discuss some of the common mistakes that divorcees make with regards to finances in divorce proceedings. Hopefully you’ll find some of these tips helpful and they can help you achieve the best possible result for you both!
Let’s jump right in.
Not being specific
When you’re listing assets – be sure to be specific in terms of what is a ‘marital’ asset versus what’s a ‘separate’ asset. Most people think of homes, joint accounts and the like as ‘marital’ assets but in a few states ‘separate’ assets can turn into joint assets over time. That can impact a lot of other decisions that you make regarding other assets on the table that warrant divvying up like real estate, retirement, inheritances and the like. Be sure you talk to your lawyers about what is classified as what. Unexpected road blocks can be avoided by doing this.
Dividing assets 50-50
On its face this seems ‘fair,’ right? Everyone walks away with something, no one feels slighted and the divorce moves along quickly. However, ‘fair’ is often confused with ‘equal’ when they’re not really the same thing. You need to take each other’s wants and news into consideration including things like tax consequences and the administrative effort in dividing assets. 50-50 splits can sometimes cost BOTH divorcees in the long-run.
Not being creative
Not everything is necessarily cut and dry. Let’s say you’re fine giving up your home to your former partner, but they can’t get approval for a mortgage buyout? While you could just sell and move on, there are other ways to facilitate the needs of your former spouse without undue legal or financial burden being placed on them. Skilled Tampa Divorce mediation experts can come up with unique settlement options to address your needs so you both walk away feeling as financially and emotionally fulfilled as possible.
Tax consequences
Not all assets are created the same. For example – X amount of dollars in a 401K is not the same as X dollars in equity in a home. One is taxed and another might be excluded from taxation altogether or taxed at a different rate. Consult with your legal experts as to what the consequences are for you owning and splitting certain aspects over the other.
Sifting through finances in a divorce is something neither party is ever really comfortable doing but it’s necessary and if neither one of you do your homework, it can be costly – for both of you. Hopefully today’s blog will help you avoid a few pitfalls so that you and your soon-to-be-ex can achieve the best possible outcome for the two of you. Good luck!
