Divorcing an ex-spouse is much more complicated than signing a document saying you are no longer married. There are many costly divorce mistakes you can make along the way that you should avoid. Take into consideration the scenarios we list below so that you can prevent any financial missteps.
Ignoring the Impact of Taxes
Some marital assets that you accumulate throughout the divorce settlement could be taxed at the end of the year. If you ignore the fact that you could be taxed on the settlement, you could lose more money than you realize. For example, you might split your investments 50/50, but the value could decrease after taxes. If you need clarification, discuss tax implications with your attorney and an accountant.
Worrying Too Much About the House
The house you shared is often seen as the most valuable possession to win in a settlement. It might seem like the winning prize, but in the end, you will be responsible for paying the mortgage, repair expenses, and taxes yourself—which could become costly if you’re single. You could split the home value during the divorce to give you both the opportunity to start a fresh life.
Forgetting To Update Estate Documents
A colossal mistake you could make when divorcing your partner is forgetting to update your estate documents and removing their name from them. If you fail to update this paperwork, and something happens to you, your home and possessions could legally go to your ex-spouse instead of your new partner or children. Do not make this mistake; as soon as you can, make the changes to these documents to ensure everything goes where you want it to.
Posting Too Much on Social Media During the Divorce Settlement
It might not seem like a costly divorce mistake to avoid, but posting too much on social media when you’re currently going through a divorce settlement could hurt your chances of saving money. For example, say you’re determining financial support; if you post photos of multiple vacations, the courts could use that against you by saying you have enough expendable income for alimony. Try to keep your social media usage to a minimum during the divorce—you can always make posts once the divorce process ends.
Divorces are stressful and anxiety-inducing enough as it is. Don’t cause yourself more pain and stress by failing to avoid the mistakes above. Start building a new life and planning for a better future by taking the divorce settlement seriously. Follow your due diligence to ensure everything is in order after everything settles.
