Eight Financial Mistakes to Avoid When Going Through a Divorce in Arizona
It is important to understand the eight financial mistakes to avoid when going through a divorce in Arizona.
Financial concerns are exceedingly important when you plan a divorce.
Unfortunately, many people getting divorced make costly financial mistakes that are hard for them to recover from.
What follows are eight mistakes that people often make in divorce, and tips on avoiding them.
#1: Know Your Finances
When divorce is on the horizon, it can be a huge mistake to allow yourself to remain in the dark about your spouse’s finances.
You need to gather proof of your spouse’s income and assets by making copies of all important financial records.
You also need to try to make sure that your spouse doesn’t sell or transfer assets before divorce proceedings begin to keep you from getting your fair share.
Hiring a forensic accounting expert and a lawyer can help.
#2: Consider Taking Your Divorce Case to Mediation
When you take divorce proceedings to court, you hand all the power over to the judge.
You have very little influence over the outcome.
When you choose divorce mediation, however, you and your spouse can decide on how to share assets and custody.
If you and your spouse are on good terms, mediation can be far simpler and less expensive than court proceedings.
#3: Hire the Right Divorce Attorney
It may make you feel good to have a combative lawyer on your side to pursue your spouse with.
Doing so isn’t a good idea, however, because it can take lawyers extra hours to put aggressive lines of argument together.
You will drain your resources with such a lawyer.
It’s best to approach divorce without emotion, as nothing more than a business arrangement.
#4: Do Not Underestimate Your Living Expenses
During a divorce, you’re asked to estimate your expenses so that you may claim alimony or spousal maintenance.
Many spouses being divorced, however, grossly underestimate their expenses, and ask for too little.
It’s important to hire a financial professional to help you prepare a budget so that you can claim fair alimony.
#5: Understand the Effect Taxes Have on Your Divorce Settlement
If your spouse offers to split the marital assets 50/50, it may seem like a fair deal.
You need to remember, however, that you pay taxes on whatever you receive.
Once the taxes are paid, there may not be much left.
Before you agree to a settlement, it’s important to calculate how much you will have left after taxes.
#6: Implication of Being Awarded the Marital Home
Many people going through divorce are attached to their home and insist on retaining it as part of their settlement.
Sometimes, they even forgo sizable financial packages in order to be able to keep their home.
They forget, however, that homes come with mortgage payments, property taxes, and upkeep.
Homes are often not very good investments, either; they tend to lose value.
When you get divorced, your focus should be on receiving enough funds to live on.
Sentimental attachment to specific assets can distract you from that goal.
#7: Learn How to Effectively Use Your Divorce Attorney
Divorce lawyers can cost $300 an hour and up.
Many people make the mistake of taking up their lawyers’ time to talk about their finances, their careers, and their feelings.
It’s important to understand that everything you do to take up your lawyer’s time costs you a great deal of money.
Whatever you need to talk about other than your divorce proceedings, you should reserve for friends, family members or a therapist.
#8: Understand the Social Security Rules for Marriages
When a couple stays married for at least 10 years, the spouse making the smaller income receives derivative social security benefits on the other spouse’s record.
On average, however, marriages end at nine-and-a-half years.
If it’s possible, couples getting divorced should wait till they become eligible for derivative social security benefits.
It’s important to be careful about your finances when you get divorced.
You may need to pay attention to mundane details. Doing it can protect your interests in very important ways, however.
If you have questions about financial mistakes to avoid when going through a divorce in Arizona, you should seriously consider contacting the attorneys at Hildebrand Law, PC. Our Arizona divorce and family law attorneys have over 100 years of combined experience successfully representing clients in divorce and family law cases.
Our family law firm has earned numerous awards such as US News and World Reports Best Arizona Family Law Firm, US News and World Report Best Divorce Attorneys, “Best of the Valley” by Arizona Foothills readers, and “Best Arizona Divorce Law Firms” by North Scottsdale Magazine.
Call us today at (480)305-8300 or reach out to us through our appointment scheduling form to schedule your personalized consultation and turn your Arizona divorce or family law case around today.