Three Costly Mistakes You Can Make During Divorce

 Posted on February 10, 2020 in Divorce

When faced with the potential cost of getting a divorce, many people look for ways that they can save money on the process. Some conclude that they can best cut costs by conducting their divorce without hiring an attorney or completing it as soon as possible. While it is true that either of these measures can save money, divorcing without legal guidance or rushing your divorce can lead to costly mistakes. You may need to revise and refile your divorce paperwork after a judge points out a mistake that makes your agreement invalid. You might not notice other mistakes until after your divorce agreement has been approved and becomes legally binding. Here are three costly mistakes that people make during their divorces:

1. Not Researching Enough: The groundwork for a successful divorce starts with gathering information on your marital finances. You need to identify all of your marital properties and how much they are worth. Bank statements, receipts, and tax returns are just a few of the documents you need to collect, and you may need to file a court order to force your spouse to turn over some documents. Insufficient research puts you at a disadvantage when negotiating the division of marital property and may allow your spouse to get away with paying less child support and spousal maintenance than they should.
2. Not Financially Separating Themselves: Once you have started the divorce, you should freeze or close your joint bank and credit accounts and open accounts in your name only. You need to start saving money in your own bank account because the divorce court can freeze your marital accounts to prevent either of you from draining the account before the division of property. You can be liable for debts that your spouse amasses in a marital credit account, even if you are in the process of divorcing.
3. Not Considering Taxes: Some decisions that you make during a divorce negotiation incur tax consequences. Keeping a property such as a house means that you will be paying taxes on that property. Making an early withdrawal from a retirement account may mean that the withdrawal is taxable income. You and your spouse may be in different income tax brackets following your divorce, which could affect how you negotiate spousal maintenance. There is no longer an alimony tax deduction.

Contact a Naperville, Illinois, Divorce Attorney

It is difficult for a person who is getting divorced to keep track of all of the divorce rules and avoid costly mistakes. A DuPage County divorce lawyer at Calabrese Associates, P.C., has the knowledge to help you get the most out of your divorce. To schedule a consultation, call 630-393-3111.

Source:

https://www.nerdwallet.com/article/finance/5-divorce-mistakes-that-can-cost-you