These 4 Money Mistakes in Divorce Can Significantly Impact Your Financial Future
Of all the issues that one may deal with during the divorce, those related to money tend to be the most sensitive and volatile. That is because, in this arena, mistakes can be costly, and they often have a lasting, negative impact. Thankfully, by avoiding these four commonly made money mistakes, parties can decrease their risk of experiencing significant financial loss in a divorce while also increasing their chances of receiving the divorce settlement to which they are entitled.
Oversharing Details About Your Personal Life and Finances
While the law does require you to provide financial disclosure to your spouse during the discovery process of your divorce, there is such a thing as oversharing. Examples of information that you may want to keep private include:
- An inheritance received after separating from your spouse;
- Vacations or vacation plans that take place after the separation;
- Information regarding spending habits or recent large purchases (even when done out of necessity);
- Raises and promotions that are given to you after the separation; and
- Any other windfall that occurs after you and your spouse have separated.
Note that this information should not be shared anywhere - not even on social media, as even this information can be used as evidence in a divorce. Remember to still disclose this information to your attorney, as they can help you determine which assets may be excluded from the marital estate.
Not Knowing All of Your Financial Details
Every couple handles their marital finances differently, but usually, one spouse is more informed than the other. Sadly, this can create some issues in divorce. For example, if a spouse who handles the finances took out a life insurance policy after placing the down payment on their family home ends up forgetting about the policy, and the other party is not aware of it, it may be overlooked when calculating the total value of the marital estate. Talk to your attorney on minimizing the risk of such an issue during your Illinois divorce.
Failing to Consider the Tax Consequences
Whether you are selling your house, keeping it, or allowing your spouse to have it, there will likely be taxes involved. If you take a payout on your retirement account, or if you receive a disbursement of your spouse’s pension plan instead of rolling it over into your own account, you could face tax penalties. Those who pay and receive alimony must also consider tax consequences of doing so, especially now that the law no longer considers alimony as taxable income, nor a taxable deduction.
Pursuing a Contentious Divorce Instead of Attempting an Amicable Split
When one party heads into their divorce with a contentious mindset, they set a tone for the proceedings. Sadly, this confrontational attitude rarely resolves matters relating to money or children, and so the process often escalates. Parties become preoccupied with “winning” their case - sometimes to the point that it actually creates more problems than it solves. For example, parties can spend years in litigation over a small fortune, only to spend it all on legal fees and court costs. Avoid such an issue (and countless others) by keeping your end goal in mind.
Contact a Seasoned Wheaton Divorce Lawyer
Of all the money mistakes that a party can make during their divorce, not contacting a seasoned attorney is potentially the most devastating of all. At Davi Law Group, LLC, we work hard to ensure our clients receive every penny to which they are entitled in divorce. As strong advocates for children, our seasoned DuPage County divorce lawyers also handle complex divorce matters pertaining to children. Schedule a personalized consultation to learn what we can do for you. Call 6309-580-6373 today.