Divorce is very emotional to say the least. Everyone’s circumstances are unique. Some may be dealing with infidelity. Some may be dealing with just growing apart. Some may be dealing with spousal abuse and want out. No matter the underlying causes of your divorce many things get pushed to the wayside during this very trying time in your life, including finances. Many people make numerous financial mistakes during the divorce process itself that they later regret. Hiring an exceptional family law and divorce attorney, such as Petrelli Previtera in Highlands Ranch, can help prevent many of these financial mistakes. In this blog post, we’ll go over some of the most common financial mistakes people make during a divorce. Contact us today to learn more!
MOST COMMON FINANCIAL MISTAKES DURING A DIVORCE
Not Having a Clue About Your Finances
As is most often the case, one partner in the marriage is usually responsible for the finances. This can lead to one partner not having any clue in where their money comes and goes. However, in a divorce, you need to know where you stand financially down to the last detail. You need to gather together your bills, bank statements, pay stubs, and investment accounts to figure out your finances. This is important because your spouse may try to hide assets from you, which is against the law and your spouse could be found in contempt if discovered. However, if you make no effort to know your finances, this may be pretty easy to do, leaving you out of money you deserve. Petrelli Previtera can help you. Call us today!
Underestimating Your Monthly Expenses
Budgeting is the bane of most people’s existence. Most people know exactly how much they make but are clueless when it comes to where their money goes. However, underestimating how much money you will need once you are divorced to live can affect your alimony and once the divorce is finalized, it will be your spouse laughing all the way to the bank. Petrelli Previtera recommends that you sit down and add up all of your bills so you have an accurate amount of your monthly expenses. You will also need to project into the future and see what your expenses will be once you are divorced. You will want to factor in inflation, insurance costs if you were on your spouse’s, and future expenses. This is insanely important to do so that you can maintain your quality of life after the divorce is finalized.
Cashing in Investments to Pay Bills
During the divorce before everything is divided, people can tend to hide money, or you don’t have anything to live off if the divorce is dragging on for months until alimony starts. Plus, you may have bought a new home already or a new car. One of the biggest financial mistakes Petrelli Previtera in Highlands Ranch sees is people cashing in their retirement accounts, such as your 401k, or their stocks in order to pay the bills and survive. However, touching retirement money early carries stiff penalties, and you could be stuck with a huge tax bill before it’s all said and done. Instead, it’s best to get a short-term loan or borrow from a family member if need be.
Fighting Over the House
Your home is one material good that many people become attached to. After all, it holds years of happy memories for you — something you need right now in the midst of unhappiness. In fact, many people will sacrifice other, more valuable goods in the divorce settlement just so they can keep the house. However, there is much more to the house than memories. With only one income you’ll have to live from, Petrelli Previtera recommends that you consider if you can truly afford to keep the house. Consider the mortgage payment, taxes, insurance, utilities, and upkeep. It may just be better to sell it.
Misunderstanding Equal Division of Property
When people divorce, they have an image that property is divided up equally, almost as if cutting a straight line down the middle. In the divorce negotiations, it is far from this crystal clear of a story. Some assets such as rental property may be worth more than their market value because they generate income. Furthermore, it will be very difficult to put a fair market price on many of your household items. However, Petrelli Previtera in Highlands Ranch recommends that you pay attention to the big ticket items and investment accounts. It is here that your soon to be ex spouse will be trying to get the upper hand in the divorce settlement.
HOW PETRELLI PREVITERA IN HIGHLANDS RANCH CAN HELP
Petrelli Previtera, top divorce attorneys in Highlands Ranch, wants to emphasize that most financial mistakes made during a divorce are decisions made based on emotion. It will be extremely hard to let go of your anger, regret, and other feelings you have in order to make rational decisions that will have long-term implications. A great divorce lawyer can help you do this.
Your divorce attorney can also help you remember to take into consideration the important facts you will forget such as inflation, capital gains, tax implications, and the like. In a divorce, you have to keep in mind your future needs more so than your present needs, which most likely has to do with getting back on your feet and healing.
Petrelli Previtera are family law attorneys in Highlands Ranch that truly care about their clients and their welfare. Through compassionate representation, we do our best to obtain the most favorable outcome for you. We handle all family law matters, from divorce, child custody, mediation, and alimony. We are experts at complex property division and child support disputes. We understand the emotional turmoil you may be facing, and we’re here to help you get through this difficult time and procure you the best financial settlement as possible. Backed by 30 years of experience, we know how to craft you the best divorce settlement. Contact us today for a free consultation!