Divorce is tricky. Very tricky. Just one wrong move can cost you and damage your financial future. This is why it is important to approach your divorce like a business transaction. Leaving your emotions out of the process and letting logic and reason rule will make a huge impact on the outcome of your divorce. Unfortunately, like many other aspects of life, this is easier said than done.
In order to stay focused and organized, it is important that you recruit the right divorce team. This might mean enlisting the help of an accountant, financial advisor, therapist, and even family and friends. Furthermore, it is just as important to avoid some costly mistakes.
Not accounting for taxes
Marital property division is usually a cause of contention during divorce. In fact, it could be what takes you from the negotiating table and into the courtroom to fight for what you deserve. But, property division is not just about deciding who gets the house in Denver. It involves hiring an appraiser to value the assets and taking into consideration both present and future tax consequences of keeping or selling particular assets. For example, many individuals forget to take into consideration that the face value of your retirement account is often not what you will end up with in the long run. When you start taking distributions from certain retirement funds, you will be subject to additional income taxes. Be sure you take this into consideration before making a final decision on your divorce settlement.
Relying too heavily on alimony
Another mistake some women make is relaying too heavily on alimony payments. For example, you will only receive alimony while your ex-spouse is alive. Once he dies, your alimony payments will cease. In order to offset the loss of income, consider taking a life insurance policy out on your ex. Also, do not forget that as long as you remain unmarried, you may have a right to receive Social Security benefits based on your ex-husband's income if he was the higher earner.
If you are considering divorce, it is important that you avoid the mistakes above. Since these are just the tip of the iceberg, be sure you have the appropriate resources available so that you can successfully manage your divorce.