As some couples in Maryland have discovered, divorce comes with deep implications emotionally and financially. Making certain financial mistakes during this process can complicate life even more post-divorce. Recognizing the kind of mistakes that can be made and proactively working to avoid them might result in a more financially secure future.
The right preparation is important
One of the biggest mistakes people make when getting divorced is not being fully aware of the family’s assets and debts. To work towards a fair divorce settlement, it’s imperative to be well-informed about all the assets, including bank accounts and property. As well, understanding debt, whether individual or joint, can prevent some ugly surprises later on. To avoid this mistake, list all the assets you know about, make copies of all documents, such as bank statements and property titles and get an updated credit report for both you and your spouse.
Other mistakes can have a long-ranging financially impact
In addition to not being well-informed about assets and debts, other mistakes made during the divorce process can come back to negatively affect your financial life years later. Some of these mistakes include:
- Being unaware of the tax implications related to each financial decision made during this process
- Not creating a realistic budget for life post-divorce and how you can support yourself and cover all your financial responsibilities
- Misunderstanding how retirement accounts work and the penalties and fees that can be incurred if they are not handled correctly or if early withdrawals are made
- Forgetting to properly address health insurance and how it will be paid
Taking the time to prepare at the beginning of the process will ensure that you can negotiate a divorce settlement that sets up a more stable financial future. Another way you might choose to protect yourself is by consulting with financial experts and a family law lawyer who can assist you during the divorce.