Divorce can inevitably become a very stressful period in a person’s life. As emotions run high and become all-consuming, many parties do not realize that financial mistakes can be made during a divorce. This article will discuss some of the financial errors your divorce attorney can help you avoid during this high-stress time.
It is likely you and your spouse share many financial commitments—credit cards, a mortgage, health insurance, and variety of monthly bills are just a few examples. Separating these commitments is incredibly difficult, and our divorce attorneys are aware of the emotional toll this reality can take on your life.
The biggest asset you will likely have trouble separating is the marital home. As a first practical point, it is imperative that if you or your spouse stay in possession of the home, you are able to afford to do so. Our attorneys are aware that there are many memories and emotional attachments that are rooted in this home. In the moment, you may just want to keep this home since it means a lot to you, but you must ensure that you can afford to upkeep the property, as well as pay the mortgage and taxes on the property independently. If you think you would be unable to meet these obligations, we advise you not to make the financial errors of relying upon your former spouse to pay for your marital home.
While you may want to avoid dealing with separating your assets from your spouses, this is essential in a divorce proceeding. Leaving financial accounts and obligations as joint ones can create a number of devastating situations—for instance, your former spouse running up debt on credit cards or refusing to separate joint bank accounts. These situations can lead to long-term financial hardships, so our divorce attorneys strongly recommend moving forward with this difficult, but necessary step.
Another oversight that can lead to financial errors in a divorce is failing to remove your former spouse from a will or trust. During a marriage, many people will name a spouse the beneficiary of a will or trust. As it is likely that you do not want any money or property going to your former spouse after the divorce settles, it is encouraged to change your will or trust as soon as possible. Doing this simultaneously along with separating assets will avoid any mishap in the future which would give your former spouse the inheritance you wanted him or her to have while your marriage was thriving.
Taxes are another financial area that you may forget about during a divorce proceeding. In the Commonwealth of Massachusetts, it is important to know the difference between spousal support and child support payments. While you may be aware that child support may only be used for your children, and alimony may be used as spousal support, you may not be aware that alimony payments are taxable, while child support payments are not.
Also, do not forget that these payments often eventually end, and it is important that you are financially self-sufficient. For instance, child support payments may stop when a child turns 18 years old, or when a child completes their college education. Additionally, based on the type of alimony you receive, payments may end if you remarry or cohabitate with a new partner, or when you become financially stable. In the moment, you may forget that these support payments have an inevitable end date, so please be sure you are not fully reliant on these support payments.
Lastly, do not rely on your ex-spouse to help you with any of these payments. Even if your ex says he or she is going to be helpful with credit card payments, car loans, or other bills, remember that your name is on them and put yourself first. If your former spouse does not hold up his or her commitment, these costly financial errors can negatively affect your future.
If you have questions or concerns about issues involving finances, family law, or other legal issues, you should contact a competent attorney. Our divorce, family, and domestic relations attorneys may be able to work on your behalf to handle your case. Contact our offices by phone at 978-225-9030 during business hours to schedule a free consultation. We will respond to you as soon as possible.