Avoid Financial Mistakes When Getting a Divorce

When you are in the middle of a divorce, the emotional challenges can interfere with the decision-making process. Don’t let your divorce cause you to make financial decisions you regret. Here are some of the big financial miscues people make in the midst of a divorce.

• You don’t have to keep the marital home if you are the parent with physical custody—Too many single parents in divorce hang onto the marital home for the sake of the children. Unfortunately, a lot of them don’t have the financial resources to maintain the marital residence
• Equitable division does not necessarily mean equal division—If your spouse engaged in adultery or other wrongful conduct, or if your ex has far greater resources than you do, you don’t have to settle for an equal distribution of property. Equitable means “fair,” but not necessarily equal.
• Don’t lose track of your monthly expenses—It’s a whole new ballgame now. Your income is different and your expenses have changed. You need to keep a log of all expenses, so that you know if you can afford the lifestyle you are living.
• Look at all financial decisions in light of the overall financial picture—Deciding what to do with the marital home should include a careful look at all financial aspects of the divorce.
• Make certain you will still get support if your ex dies or becomes disabled—You can require that your ex obtain a certain amount of life insurance or a policy of disability insurance.
• Make certain you get your fair share of retirement assets—Whether you worked outside the home and contributed to your own retirement plan or were a homemaker, you have a right to share in the accrued retirement plan benefits. If your ex had a defined benefit plan, you may need to retain an actuary to determine the present fair market value of plan benefits.
• Be careful about your liability for unsecured debt, such as credit cards—As a general rule, unsecured debt is a marital liability.

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