Divorce has only one purpose, and that is to end the legal union of a married couple. However, that does not mean everyone who gets a divorce has the same experience with one another. Some may go through a lengthy and more chaotic procedure, while others may win the case in a swift.
If there is one thing they have in common, that is the handful of mistakes that occur during the process. If you are planning on getting divorced or already amid negotiations, listed below is a list of the usual mistakes and how you could avoid them.
Assumptions of the status quo.
One objective of getting a divorce is to find a just division of marital assets while taking into account your current situation and the value of all your assets. The downside is that when individuals focus on the “now” they tend not to give attention to future events.
It is crucial to keep in mind that any unfortunate events can arise after the divorce. You may lose your job, be physically incapable, your children may need health maintenance, or other similar situations. You may even be surprised that your asset has depreciated dramatically. Therefore, when you negotiate your settlement, you need to think of your future and the changes that would occur at any time. You have to consider potential changes to protect you from the risks of unexpected circumstances.
Wrong expectations in lifestyle.
Some decisions can have significant financial implications for spouses, especially when it comes to the marital home. Whether you deliberate on keeping it or selling it, housing is one of the crucial lifestyle decisions that you need to face when getting a divorce.
Unfortunately, a lot of divorcing individuals have wrong expectations. They think about having the same lifestyle in a divorce. When this happens, they tend to disregard the needed financial implications to fulfill their lifestyle expenses. It is also common among divorced parents to want to give the same lifestyle for their kids. Nothing is wrong with wishing to provide your children with luxurious parties and gifts. The wrong part is when you compete with the other parent through spending. Keep in mind that your priority is your child, and you have to be good at co-parenting.
Failed remarriages.
A lot of divorced individuals are surprised to know that divorce on the second marriage has a higher rate than on the first marriage. Many people who marry the second time do not have a successful marriage because of the complications in finances and life situations. It is even unfortunate that this occurs in the latter part of life when spouses are about to retire and no longer have enough time to fix the negative impacts on finances after divorce.
This is why there is such a thing as a prenuptial agreement. This agreement is beneficial to spouses as it assists them in considering and preparing for a marriage breakup, even if they do not want to imagine such a heartbreaking situation.
Prenups deal with asset division and may include a list of rules regarding the marital home, such as how long a spouse can stay if they separate. Since the second marriage divorce rate is only increasing, it is advisable for individuals who contemplate remarrying to see a lawyer and talk about potential prenuptial agreements. Your attorney may also help if you want to alter your existing estate plan.
Poor financial education.
One common cause of mistakes during a divorce is the lack of financial education. People usually learn the fundamentals of financial literacy through experience, not in an academic setting. If you try to educate yourself from different internet sources, you may only end up getting confused about where to begin.
The best way to avoid this mistake is to start your personal balance sheet. Not all people do this task, but it is as simple as listing down your assets and liabilities. It is also similar to using electronic resources that connect your accounts and analyze the allocation of your assets. Once it is made, you can start understanding your tax return. It is best to have it done before getting a divorce. It will give you an idea of the changes to expect once you become a single taxpayer.
