Divorce Money Mistakes Will Cost You

Business Insider recently posted a helpful article written by , Associate Press, describing 5 big mistakes that can cost you money during a divorce.

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The article talks about these 5 simple divorce mistakes that can have a serious impact on your money – here is my take on the 5 mistakes:

  1. Keep quiet on social media – I always tell all of my divorce clients to never ever post anything on social media about your soon-to-be ex-spouse. This goes applies before the divorce, during the divorce, and after the divorce. Facebook posts are being used in almost all of divorce cases right now. Keep a clean Facebook feed and you will be in the clear. This also goes for text messages. Whatever you say in a text message will last forever, and can be introduced in court.
  2. Not getting all the paperwork – Make sure that you gather all of your financial documents before you start a divorce. Once you file, you should give all of your documents to your attorney so that they can review them and make the best decisions/arguments on your behalf by knowing your personal situation. Pay stubs, bank statements, retirement account statements, social security statements, home purchase agreements,  and tax returns should all be mandatory, however, that is just scratching the surface in some cases.
  3. Ignoring tax consequences – I always tell my clients to meet with a CPA or accountant when going through a divorce to inquire about any tax consequences. Taxes can become a costly issue when there is real estate being sold, retirement accounts being transferred/withdrawn, and additionally when going from filing your taxes joint-married to single. Keep Uncle Sam out of your wallet and talk to a tax professional.
  4. Leaving joint credit accounts open – When you get married, almost all couples have some type of joint account including bank accounts and credit cards. Your judgment of divorce will lay out how all of this will be divided. However, it often happens that the person not responsible for a debt in the judgment is left still on as a joint debtor after the divorce is finalized. If your ex-spouse then fails to pay this debt, your credit score will suffer. My suggestion is always try to eliminate all joint accounts as part of the settlement. This will help ensure that you do not end up in front of your judge after you are divorced – spending more money and time on an old issue.
  5. Assuming a court fight is inevitable – Going into a divorce with your fists up will guarantee you one thing – you will spend a lot more time and money than if you go into it with more zen-like approach. I understand that this may be very difficult to do given your circumstances, however, you liked this person at one time enough to marry them so there has to be a way to resolve your issues amicably. This will often be done through alternative dispute resolution such as mediation or collaborative meetings.

 

Kory K. Shimek, Esq.

Shimek Law Firm, PLLC