Common Financial Mistakes Made in Divorce Settlements Pt. 2

by Kristen White Blogger

A previous article discussed common financial mistakes to be avoided by divorcing spouses in respect of divorce settlement. This article will discuss other common financial mistakes that must be avoided when negotiating your divorce settlement.

Becoming a financial victim - one of the biggest mistakes any divorcing spouse can make is to be in the dark when it comes to the marriage’s finances. If your spouse has always handled all the financial decisions in your household and you do not have any information about the income and assets that you and your spouse have, then your spouse will have an unfair advantage when it comes to settling the financial issues of your divorce. If you suspect that your spouse is planning a divorce, it is important that you gather as much information as you can in respect of finances. Make copies of important financial records such as account statements and all the data relating to your marital lifestyle. For example, savings, retirement, checking accounts, tax returns, etc. One thing to look out for is any cash held in joint checking and brokerage accounts and the cash value of life insurance policies. If your spouse uses or moves assets without your knowledge you may hire legal and forensic accounting experts to help you locate and value the assets.

Mediation - if you and your spouse are able to work together and communicate freely in order to reach a fair settlement on most or all the issues in your divorce, mediation may be the best route for you to take. Mediation involves a neutral third-party mediator that helps divorcing parties reach an agreement on the issues in their divorce. The mediator provides divorcing parties flexibility when it comes to making their own decisions about what works best for their family as compared to the traditional legal process. However, it is important to note that mediation is not for all couples especially those where one spouse is hiding assets or income from the other or if one spouse is unwilling to compromise.

Punishing your spouse - hiring a combative lawyer in order to punish your spouse is a very bad idea because most courts will not punish your spouse financially for being a bad person. Secondly, hiring an attorney to punish your spouse will cost you more financially as this will require the attorney to increase the number of hours he or she spends on your case thus increasing the divorce costs. It is advisable for spouses to try and take the emotion out of their divorce and treat their case as a business arrangement. One article states that, ‘the best revenge is to live well after the divorce is over’.

Accurate budgeting - it is also common for divorcing spouses to underestimate living expenses when producing their initial budget for temporary alimony. And as a result they are later unable to cover all their bills. It is advisable that a spouse use a financial professional to help produce an accurate and complete budget.

For legal advice on divorce seek out a divorce attorney in Sacramento.

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For an El Dorado County child support attorney the author recommends Natalia V. Jeffs, Attorney at Law.