When you go through divorce, avoid these financial mistakes

No matter how amicable you think your divorce is, and no matter how often you tell yourself that the divorce isn’t about money, a divorce will always be about money. That doesn’t mean that’s all you care about in life — it just means that finances, property and other factors involving money are inherently part of divorce. Every couple has to deal with it when they decide to go their separate ways.

So, accepting that finances are inherent to divorce, what kind of mistakes do divorcing couples need to avoid to ensure they have the best chance to end the divorce in a good financial position? Let’s take a look at a few factors:

  • You have the option to trade part of your financial settlement to obtain some other asset in the divorce. As tempting as this may sound, it may not be beneficial to you in the long run. Thoroughly discuss these deals with your attorney.
  • You have to look at all your financial elements as a whole, not as numerous individual pieces. For example, the tax implications of handling just one financial matter while others sit idly by could have massive tax implications.
  • When you draw up your divorce settlement, make sure there are specific provisions in it that make the settlement enforceable. In other words, if your spouse dies, loses his or her job, or becomes disabled, you will want to have some insurance in the settlement that guarantees you get what the settlement entitles you to.

Source: TIME, “The 7 Biggest Money Mistakes That Divorcing Women Make,” Lili A. Vasileff, July 9, 2014

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