If you decide to move forward with divorce, it's imperative to avoid any financial mistakes that could complicate your life.
While this is easier said than done, the knowledge you collect upfront will go a long way in helping avoid trouble.
Here are some common financial mistakes to avoid in divorce:
- Keeping the family home if you can no longer afford it. It sounds like a great idea to stay put, until you realize that the mortgage and upkeep is bleeding you dry every month.
- Choosing the family home instead of liquid assets. For example, you may be offered the family home if you give up your right to comparably valued assets, such as retirement accounts. You need to think long and hard before you agree to this trade off.
- Ignoring tax implications. With so many moving parts, you need to understand the tax implications of every decision you make. For example, retirement accounts are not taxed the same as a savings or checking account.
- Saying yes just to bring an end to the process. Everyone is in a hurry to bring their divorce to a close, but that doesn't mean you should make rash decisions along the way. You'll end up regretting it in the end.
These are far from the only financial mistakes you can make in divorce, but they are definitely among the most common.
If you find yourself closing in on the divorce process, make a list of the many things you need to do. With this approach, you can avoid common mistakes all the while protecting yourself.