Divorce is an emotional event. However, it can also be fraught with financial risks. Florida property division decisions can damage one or both parties, if neither has made appropriate plans to avoid disaster. Parties to a divorce view marriage from a very different perspective than they did on their wedding day.
Although most divorced people eventually get over the emotional trauma, financial mistakes can be forever. Avoid money mistakes whenever possible. Here are some common and, potentially, long-term mistakes that you should avoid.
Do not give all of your assets away to ease emotional trauma. This is a common and costly financial error. Many people embroiled in a divorce and engulfed by conflict make concessions they regret later. Both parties should separate financial issues from emotional turmoil. The two sides should protect their own financial wellness, agreeing to an equitable property division.
Do not make assumptions about debt obligations being paid. This mistake could damage your credit for years into the future. For example, signing over the title to your home, the former marital domicile, does not remove you from the mortgage loan. Let your lawyer take steps to change this debt obligation to your former spouse, as you no longer have control over payment — or non-payment — of this loan.
Do not ignore the major budget adjustments needed for your survival. Often called “budget denial,” this error, particularly if you lived on two incomes during your marriage, can undermine your ability to have a decent quality of life. Prepare a new budget prior to the divorce process to help you manage your household budget.
Avoid lavish spending on your children. Your guilt about involving your kids in a divorce conflict often leads to overspending to reduce your emotions. Avoid getting into a financial competition with your ex-spouse where the children are involved. Along with further hurting your already precarious financial well-being, your children will not react positively to this plan. Custody battles are emotionally draining on parties to divorce and the children. Your bank account should not suffer from your actions, also.
Source: Huffington Post, “The five worst divorce money mistakes … and how to prevent them,” Suzanna de Baca, July 13, 2012