5 Money Mistakes to Avoid in Your Divorce Financial Settlement
The cost of a divorce trial for a couple ranges from $78,000 to $200,000.
Additionally, taking things to court prolongs the entire divorce process. In larger cities, it’s not uncommon for some proceedings to drag on for several years.
As a result, many couples do their best to avoid going to court. In fact, 95% of divorces in the US end in a settlement. But there are still plenty of things that can go wrong during a divorce financial settlement.
Read on to find out about some of the most common divorce settlement errors!
1. Letting Your Anger Get the Best of You
It’s easy to become overwhelmed with emotion during a divorce financial settlement. But acting spitefully against your spouse can also cause them to take the divorce to court.
Instead, The Texas Divorce Lawyer blog recommends that you try to look at settlement offers from your spouse’s perspective too. Avoiding one-sided offers gets you the same outcome that court would, but without the fees. Plus, your spouse will be more willing to work with you on a settlement rather than turn it into a pricy court battle.
2. Hiring the Most Expensive Divorce Lawyer
The average cost of a divorce lawyer in big cities like Dallas or Los Angeles ranges from $300-$350 per hour. Even worse, high-end divorce attorneys can charge more than twice as much.
Many people opt for expensive lawyers because they associate a higher price with higher quality. However, this assumption isn’t necessarily true. Therefore, you’ll have to conduct more research to find the best lawyer for your situation.
Using the internet, compile a list of at least 3-5 lawyers in your area. Next, check the online reviews for each one. Finally, take advantage of their free consultations, and ask as many questions as you can.
3. Evaluating Settlement Proposals Poorly
Ideally, you want to wrap up your divorce settlement quickly. But it’s still important to analyze each proposal thoroughly. If you fail to consider factors such as taxes and inflation, you may run into financial issues post-divorce.
Always be wary of a proposal that looks too good to be true. Have an attorney review the proposal before finalizing anything.
Also, if your financial situation is complex, hire a certified divorce financial analyst. They can help with financial planning while your lawyer handles the legal side of things.
4. Getting Too Attached to Certain Assets
Your first instinct during a divorce financial settlement is to fight for every asset. That said, it’s not worth passing up a good settlement over one asset. Sometimes, that asset isn’t even worth keeping.
For example, if you cannot afford a home, it’s not a good idea to pursue it. Even if you manage to get it, you may put a dent in your retirement savings.
Instead, focus how you can secure the best financial future for yourself. Your primary goal should be to ensure that you have enough money to cover your living expenses.
5. Concealing Your Assets
Over 7 million Americans admit to hiding an account from their partner.
However, lying about your assets during divorce proceedings is against the law. So if you hide assets and your spouse takes you to court, you may end up facing penalties if they find out. Plus, it harms your credibility during a divorce trial.
To prevent your spouse from getting away with it, gather as many documents as you can. Look at their last 3-5 years of tax returns. Also, check their account statements too.
Having a Smooth Divorce Financial Settlement
When going through a divorce settlement, it’s important to remain civil to your spouse. Be transparent with your information so you can build trust with the other side.
If you’re looking for more helpful tips, feel free to check out our life outside of work blog!
