A few months ago we posted a blog on some common financial mistakes couples make in divorce mediation and proceedings and we felt it was worth it to add in a few more words of advice.
Finances are usually the most significant obstacle to a smooth divorce proceeding, and there’s a lot to think about so for the sake of being thorough – we’ve got some more things for you to think about. Let’s jump right in!
Understanding the value of assets
Truth be told – the overwhelming number of financial issues in a divorce proceeding are really easy to put a price tag on. Things are what they are in most cases. In other instances though – figuring out the true value of something that is considerably more complicated.
Any time we’re talking about a car or a house, it’s likely going to be complicated. While both are assets that have an on-paper value, you might not be able to sell them for that figure. It makes liquidating that asset more difficult.
Folks also tend to overvalue items and assets based on their emotional connection. We all form attachments to certain things – and placing added worth on something that might not have much in the way of real-world value is common.
Not counting credit
Divorces almost always have a significant impact on people’s credit ratings because you’re basically reducing income in half and what might have been easily affordable before a split has not become a financial albatross.
The usual sticking point in proceedings however- usually comes in the form of pre-existing agreements you and your spouse entered into while you were married. Maybe it’s a secured car loan, a mortgage or credit cards in both of your names. Divorce does NOT alter those agreements and you will still be responsible for making payments. If someone who is responsible for making payments doesn’t, it will impact you both. Make sure you have agreements in place as to how certain debts will be paid and managed.
Taxes, taxes, taxes
Divorce is an uncertain life event but like they say – the only guarantees in life are death and taxes and divorces don’t change that. Remember that when you’re dividing property up – taxes often get overlooked and their impact can be substantial. Especially when it comes to real estate, stocks and other investments – make sure language is clear and have a broad understanding of what the tax implications are for the dissolving of those joint accounts. Sometimes it’s not just the payout, it’s who is responsible for dividing up the tax bill that comes with it.
Like we said – financial issues are almost entirely ‘the issues’ in a divorce and there are many pitfalls to consider and avoid. Hopefully today helped shore up a few blind spots you might have had. If you are looking for divorce mediation in the Tampa, FL area, feel free to give us a call and we’ll be happy to help. Until then -good luck!