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Five Financial Mistakes to Avoid in a Divorce

Wed 17th May, 2023 Family Law

Divorce can put a severe emotional strain on those who are going through it, but it can also cause financial strain both during and after the divorce process. Depending upon how long a couple has been married and the extent to which they have commingled their assets, untangling each spouse’s finances and financially planning for post-divorce life can be a significant undertaking. The best way to avoid financial mistakes during divorce is with the assistance of a Stockton divorce attorney

Not Understanding Your Assets and Liabilities 

Beginning the divorce process without having the full picture of your financial situation is a mistake for several reasons. While you may know your monthly income, you may be unaware of exactly how much money is coming in and going out, especially if one spouse handles paying the bills. In some cases, spouses may not even know the passwords to their online banking portals, investment portfolios, and utility accounts. Each spouse must also disclose all of their finances to the other spouse, which is difficult to do without having the full picture.   

Failing to Search for Hidden Assets

Hiding assets from spouses is illegal in California, but that does not mean that it is an uncommon practice. It may be even more common in high-asset divorces, as such couples generally have access to sophisticated financial instruments that make hiding money relatively easy. Do not trust that your spouse has disclosed all of their assets to you — investigate them to find out if they are trying to hide something.  

Fighting to Keep Assets You Can’t Afford

Spouses frequently develop emotional attachments to their physical assets, particularly homes, cars, jewelry, artwork, and pets. However, emotional attachments can easily cloud a spouse’s financial judgment and lead them to fight to retain assets they will not be able to afford post-divorce. Avoid this mistake by being realistic about what you can and can’t afford and what is truly worth fighting for. 

Underestimating Your Post-Divorce Expenses 

Each spouse’s financial situation will change radically after a divorce, but many divorcing spouses do not understand the scope of these changes. When calculating your post-divorce expenses, remember that it generally is more expensive to maintain two separate households than one combined household. As such, most expenses — including housing, utilities, and transportation, will increase significantly after a divorce. 

Rushing Into a Settlement 

It is not uncommon for divorcing spouses to want to get the process over with as quickly as possible. This can sometimes lead one or both spouses to rush into a settlement that may not be in their best interests. While property division negotiations can be unpleasant, your best opportunity to reach a deal that works for you is before, not after, divorce.  

Safeguard Your Financial Future With Help From a Stockton Divorce Attorney

Mistakes during the divorce process can have far-reaching and long-term implications for your finances. The best way to safeguard your financial future during a divorce is with help from an experienced attorney. For more information, please contact a Stockton divorce attorney at McKinley, Conger, Jolley & Galarneau by using our online form or calling us at 209-477-8171.

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