Divorce can be a tumultuous and overwhelming time for anyone. During the emotionally charged process, many people unwittingly make mistakes that can have long-lasting consequences.
To prevent such errors, a person should prepare well before heading into divorce proceedings.
Waiting too long to budget for life after divorce
Regrettably, 58% of Americans live paycheck to paycheck. As a result, most are not ready for an emergency or significant life change. Furthermore, many continue to leave financial planning on the back burner as they go through the divorce process.
Budgeting is important, no matter one’s circumstances, but the major adjustments that come with a marital separation make recalculating immediate and long-term expenses even more important. A person should also take into account potential changes in employment, housing situations and income when crafting a post-divorce budget to minimize the stress and strain.
Settling just to get the process over with
While it is natural to want the divorce process to be over as quickly as possible, hastily agreeing to unfavorable terms can cause unnecessary financial and emotional hardships. Thoroughly reviewing settlement proposals and striving to reach a fair agreement will benefit both parties in the long run. For example, a satisfactory initial agreement can prevent returning to court for post-judgment modifications.
Ignoring estate planning
Estate planning is an often overlooked aspect of divorce. Updating wills, trusts and beneficiary designations on insurance policies and retirement accounts can help ensure a smooth transition and protect one’s interests.
Having unrealistic expectations
Divorce can also create a sense of urgency to “win” or attain an ideal outcome. However, having unrealistic expectations can hinder the possibility of a timely and practical resolution. Understanding the legal process and being willing to compromise can lead to a more favorable and agreeable outcome for all parties, especially the children.
Trying to hide assets or waste money
Attempting to hide assets or spend money frivolously during a divorce is not only unethical but can also result in severe legal consequences. Being open about finances and assets will expedite the process and ensure a more equitable distribution of marital assets.
Divorce is inherently stressful and complex. However, with careful preparation and a keen awareness of the potential pitfalls, individuals can avoid common mistakes and navigate the process with confidence.