As much as possible, your main focus in settlement negotiations-at least when it comes to financial issues-should be to make sure you'll have enough cash for living expenses after your divorce. Even when you're deciding who keeps the family pet, you'll need to account for vet bills and other costs. Similar questions may apply to other assets.
Often, these fights stem from an emotional attachment to the house or an assumption that the primary custodial parent should keep the home for the sake of the children.īut you shouldn't let these considerations get in the way of a clear financial assessment: Can you afford a house buyout (which will involve either refinancing or trading other significant marital assets)? And can you afford the ongoing expenses of owning the home? You might consider continuing to co-own the family home for a period of time after the divorce, but that option has financial and other risks. Many couples have bitter fights over who gets to the family home after divorce. Fighting to Keep the Family Home or Other Assets You Can't Afford If you can afford it, a financial expert can help you project into the future (including into retirement years) to learn what it will take to support your current lifestyle. You need to come up with a solid, realistic budget in order to negotiate fair agreements about property division, alimony, and child support. Still, far too many people underestimate their post-divorce living expenses. This is especially true in a time when many divorced parents share physical custody of their children, which typically requires bedrooms for the kids in both homes. We don't need to tell you that it's more expensive to maintain two households than a combined one. Underestimating Your Post-Divorce Expenses Your financial future will depend (at least partially) on getting your fair share of the value of all the marital assets, minus the debts. Once you can see the complete financial picture, you can also avoid the related mistake of arguing over one asset at a time. You might need to get your own independent valuation-rather than simply relying on an expert your spouse has hired-particularly if you own significant or complicated marital assets like a family home, other real estate, a business, and a pension or other retirement accounts. You should also inspect and take pictures of the contents of any safety deposit boxes you and your spouse have.Īlong with gathering a list of all your assets and debts, it's important to get an accurate valuation of the assets, and to understand which are marital property and which are separate property. statements from retirement accounts and pensions.checking and savings account statements.Track down and make copies of important financial records, including: This can be an issue for all spouses-but especially important for those who've let their spouse handle the major financial decisions during the marriage.Īs soon as you anticipate a divorce, you should gather as much information as you can. The biggest mistake you can make is not to have clear, complete information about all of your finances. Failing to Get a Complete Picture of Your Finances Failing to Try Mediation-or Rushing Into a Settlementġ.Failing to Consider Potential Bankruptcy Consequences.Failing to Consider Eligibility for Derivative Social Security Benefits.Forgetting the Impact of Inflation and Other Future Developments.Not Considering Support for College or Other Long-Term Expenses.Not Controlling Insurance for Future Payments.Not Following the Rules for Splitting Retirement Accounts.Ignoring the Tax Consequences of Settlement Proposals.Not Considering the Income Potential and Liquidity of Assets.Ignoring the Possibility of Hidden Assets.
#Divorce financial settlement trial
Going to trial means that divorce will cost more and take longer. That's a good thing for a number of reasons. Most couples who are ending their marriage reach a divorce settlement agreement at some point during the process.
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