How to Avoid Financial Mistakes in a Divorce

How to Avoid Financial Mistakes in a Divorce

Divorce is a costly endeavor. The average divorce may cost around $15,000. A nasty divorce could cost much more than that. 

Bad decisions during a divorce can create even more of a financial mess. Some people try to get revenge on a spouse by using credit cards and spending too much money. These are behaviors that can come back to haunt you. Here are some other mistakes you should avoid.

Doing a DIY Divorce

A legal matter like a divorce is not something you can do yourself successfully. Lawyers understand the law and can make sure you get what you deserve. What happens during your divorce will affect your future, so make sure it is done right and that you get the assets you are entitled to receive. 

Rushing Through the Process

You may be fed up and simply want to be done with your marriage — and the divorce, for that matter. However, getting the process over as quickly as possible is not in your best interest. You want to make sure you get what you deserve financially. This may mean sticking it out longer than you expected, so you are not treated unfairly.

Going Straight to Litigation

You do not have to battle out your divorce in court. In fact, it is recommended that you do not. Litigation is costly and time-consuming. It is better to start out with mediation. Mediation allows you and your spouse to negotiate over key issues and maintain control over the outcome. Do not leave the outcome to a judge. Consider mediation first — it is cheaper and private.

Misvaluing Assets

It is important that each party get assets valued so that they can ensure assets are divided fairly. This is especially critical for major assets such as businesses and homes.

Being Forced to Pay Off All (or Most) Debts

You need to be aware of all your assets as well as debts. Your and your spouse’s debts need to be out in the open, so they can be split equitably. It is possible that creditors will come after you for your spouse’s unpaid debts, affecting your credit. It is best to get them refinanced or paid off ahead of time.

Not Going After Retirement Assets

Do not leave retirement money on the table, especially if you are over the age of 50 and thinking about retirement. Even if you have your own retirement account, it may be much less than your spouse’s. A qualified domestic relations order (QDRO) allows retirement plans to be divided fairly in a divorce without incurring early withdrawal penalties when receiving the money before age 59½. If you do not have a retirement account, but your spouse does, you will want to make sure you get your fair share. 

Contact Us Today

Divorce can be complicated. One wrong move can affect your post-divorce life.

Count on the experienced Michigan divorce lawyers from Lucido & Manzella, P.C. to guide you through the process. We will help you understand your legal rights and responsibilities. Schedule a consultation by filling out the online form or calling (586) 228-3900.