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Guiding You Through Complex Legal Matters

Guiding You Through Complex Legal Matters

3 detrimental financial mistakes to avoid during divorce

| Jun 4, 2021 | Firm News

The U.S. News & World Report states that while sources approximate $15,000 as the median cost of a divorce, once you add up all extraneous expenses it ends up being considerably higher. It also warns that court filing fees alone may rack up to several hundred dollars. 

There are mistakes you may make during the divorce process that may end up costing you more financially.  

1. Forgetting to factor in taxes

You may be liable for taxes on any settlement you receive. The taxability of assets may also mean that the property allocated to you may actually be worth less than originally evaluated. Working with your soon-to-be-ex-spouse and a tax accountant to estimate its after-tax value may ensure a more equal split.  

2. Failing to realize the effect of time

Property declines in value over time. When allocating resources, keep this in mind. It is also important to remember it and inflation when negotiating settlement aspects like paying for your children’s college. An amount that covers four years of tuition and related expenses at a decent university today may not do so in nine years. 

3. Allowing spite to influence you

If the end of your marriage was particularly painful, it may be hard to let go of lingering resentment and bitterness. You may experience an urge to fight for the sake of fighting or draw out the battle to hurt your former partner. This only hurts you financially since in the end you owe more fees for all the time and services contracted. Removing emotion from the equation may help keep you from missing details.  

Ensuring you take into account all factors and not letting feelings cloud your thinking during divorce proceedings may help you avoid decisions that may cost you.