Unfortunately, many people make financial mistakes that jeopardize their security following their divorce. Understanding what you can do to protect your financial interests during this process is crucial. Please continue reading as we explore the top financial mistakes people make during the divorce process, how to avoid them, and how our determined Bristol County Divorce Issue Lawyers can assist you during these difficult times. 

What Are the Top Financial Mistakes People Make During the Divorce Process?

To minimize the financial damages of divorce and place yourself in the best possible position to start over, you must familiarise yourself with the most common financial mistakes and how to avoid them. The top financial mistakes people make during the divorce process include but by are no means limited to the following:

  • Emotional decision-making: Divorce is emotionally charged, leading many to make impulsive financial decisions based on their anger or resentment. To protect your financial stability, you must approach decisions with a rational mindset. It’s imperative to consult an experienced lawyer who can provide an objective perspective, ensuring decisions are made in your best interest.
  • Rushing the process: While you may want to expedite the divorce process to reduce the emotional turmoil, it can significantly increase the risk of financial mistakes. This can lead to a less thorough evaluation of assets, overlooking important details, and could result in an unfair settlement in which you don’t receive your full entitlement to marital property. Taking time to gather information can prevent hasty decisions that may not be in your best interest.
  • Overlooking hidden assets: Unfortunately, a deceitful spouse may attempt to conceal assets. This can lead to an unfair distribution of property. As such, you must remain vigilant about potential hidden assets. You may even consider enlisting the help of a forensic accountant if you suspect your spouse has failed to disclose their finances fully. To avoid an unfair settlement, you should gather comprehensive financial information.
  • Failing to consider tax implications: During negotiations, people often make the mistake of focusing on immediate financial settlements without considering long-term tax consequences. You should consider the tax consequences of dividing assets like retirement accounts or spousal support.
  • Failing to update beneficiaries and legal documents: Following a divorce, many neglects to update their beneficiary on important documents like life insurance policies, retirement accounts, and wills. This simple oversight can result in your ex-spouse inheriting assets. For instance, if they remain the beneficiary on your life insurance policy, they may receive the payout even if you’ve remarried. You should review and update all legal documents once the divorce is finalized. This will ensure your valuable assets go to the intended recipients.
  • Underestimating post-divorce living: When you separate, you might misjudge the cost of living independently. To prevent this, you should create a comprehensive budget and make the necessary lifestyle changes to compensate for the loss of income.

If you are going through a divorce and need quality legal support, please don’t hesitate to contact an attorney from The Law Offices of Cynthia L. Hanley, P.C. We are ready to fight for the best possible outcome on your behalf.