Five Financial Mistakes to Avoid in Divorce
Your financial situation after divorce may be very different from what it was during your marriage. There may be additional expenses you did not account for. Your income may be lower than it had been. If you receive spousal maintenance, it may not allow you to enjoy the lifestyle you had during your marriage. And as your children grow older, you may face additional expenses for health care, education and special activities that you hadn’t expected.
Sound guidance from an experienced attorney can help you avoid many of these problems after divorce.
Shapiro Family Law is a team of experienced divorce attorneys serving Denver and Colorado. We work hard to help our clients obtain property settlements that are fair and that minimize the financial stress that comes with divorce. We can review your situation, answer your questions and provide you with practical advice concerning your finances after divorce.
Five Financial Mistakes That Can Affect You in Divorce
These are five of the financial pitfalls that can cost you money after your divorce:
1. Underestimating your expenses — When you divorce, you will live in a separate household, making you responsible for most or all of your household expenses. Our firm can help you prepare a budget and provide guidance regarding these issues so that you are not surprised when your monthly bills come due.
2. Deciding to keep your home for emotional reasons — Many people have sentimental attachments to their homes. But owning a home can be an expensive proposition. As the sole owner, you will be responsible for paying for the mortgage, utilities, property taxes, routine upkeep and major repairs. You need to view your home as a financial investment, not as a source of emotional stability. You may be better off selling your home rather than keeping it. That said, Shapiro Family Law has creative solutions that may enable a divorced person to keep the family home. We can help you make the decision that is right for you.
3. Unsecured debts — Creditors may hold you responsible for the debts you and your spouse incurred while you were married even if assigned by the court or by agreement to one or the other spouse. You may be held liable for those debts, unless they are paid off before your divorce or provisions are made in the divorce settlement. However, debts offset the value of assets in a divorce.
4. Failure to get insurance to cover child support and spousal maintenance — It may make sense to insist that the payer obtain disability and life insurance, naming you as the beneficiary. If the unexpected happens, you will then have a continuing stream of income, even if the payer can no longer make child support and spousal maintenance payments. The same is true for a parent who has custody of a child due to the death of the other parent. The parent who was the caretaker should have life insurance to cover costs related to daycare, etc., upon his or her death.
5. Failure to consider your entire financial picture — Some people view each source of income and expense separately, without understanding the effects of taxes, inflation and investment returns that vary over time. At Shapiro Family Law, we take a comprehensive approach to develop the optimal solution for every client.
There are many more financial issues that can affect you during and after your divorce. A lawyer at our firm can assist you.