Full credit of this article goes to Karen Covy
The two things that people worry about most in divorce are their money and their kids. Unfortunately, worrying about money doesn’t prevent those same people from making enormous financial mistakes in divorce.
Here are a list of the top financial mistakes people make in divorce. If know them, you can (hopefully) avoid making them yourself.
- Not taking the time to do an accurate post-divorce budget BEFORE you settle!
Doing a budget is a hassle. Roughly two thirds of Americans don’t make (let alone follow!) a budget. But trying to settle your divorce case without making a budget is like trying to drive from Texas to New York without a map. You can do it, but you are probably going to get lost a lot along the way.
- Not insisting on getting all of your (and your spouse’s) financial documents.
No one likes to spend days digging up and organizing old financial documents. But nothing causes people to make more divorce money mistakes than not getting the financial documents that show whether their budget and balance sheet are accurate reports of their financial situation, or simply creative fiction.
- Not getting assets valued.
Getting your house appraised or your spouse’s pension valued when you are getting a divorce is a hassle. It takes time and costs money. But the only way to really know what your house is worth is to sell it, or get it appraised. The only way to know what a pension is worth is to get it valued. If you choose not to do either, that is fine. Just know that, without having accurate asset values, you really have no idea how much either you or your spouse is getting in your divorce settlement.
- Not looking at (and understanding!) all of your financial documents.
It is not enough to get the financial documents that show the state of your family’s finances. You actually have to read them and understand them. If going over numbers makes your head spin and your eyes glaze over, all I can say is: You’re going to have to suck it up and learn. Or risk getting screwed. It’s up to you.
- Relying on your lawyer to do everything.
Lawyers know the law, but they are not accountants or financial planners. If your finances are complicated, if you own multiple businesses, or have lots of different investments, you may need to either consult with a divorce financial planner, or hire a divorce attorney who has a strong financial background. No matter who you hire, you are also going to have to carefully review your financial documents yourself. No one will be able to spot financial inconsistencies better than you will.
You can read the other half of this article on Huffington post here: http://huff.to/2mFuiso