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Avoiding Financial Pitfalls in a Divorce

There are some common things that a person may be advised not to do when it comes to a divorce. For example, people are encouraged not to post too much information about the divorce on social media, not to make major decisions about the divorce based on emotion, and to avoid financial pitfalls stemming from the divorce. Financial pitfalls are easy to miss in many cases because there is so much going on in the divorce that the spouses may not be thinking of the bigger picture.

In a divorce, the spouses routinely exchange financial disclosure information. This information is supposed to aid in the spousal division of property. The first mistake in a divorce would be to provide inaccurate financial information. Trying to hide assets is not a good idea because of the actions the court may take to punish the spouse for hiding the assets. However, providing inaccurate information on expenses can be just as detrimental.

A spouse who undervalues his or her expenses could end up with a lower amount of spousal support than he or she would have had the correct expenses been listed. If a person is unsure about the nature of their monthly expenses, he should request bank statements for a number of months, and try to figure out what he spends his money on. This can be a good start to determining how much the person would need to meet monthly expenses.

Another financial pitfall when it comes to divorce is insisting on staying in the family home. This is a tough one for people who get divorced and are awarded majority parental responsibility for their children. The parent may want to stay in the house for the sake of the children, even when it makes more financial sense to sell the house. Parents sometimes underestimate how much it will take to keep the house on a single income, and it could spell financial disaster in a short amount of time.

Some spouses also forget to factor in retirement accounts when considering the division of property. In many cases, the portion of a spouse’s retirement account that was earned while the spouse was married is considered marital property and is subject to equitable division. There are certain orders that need to be entered to allow a spouse to get these funds. A divorcing spouse can also use his right to get a portion of a retirement account to negotiate with the other spouse to get a different asset in exchange for not taking a portion of the retirement account.

Contact an Experienced Attorney

There are many different financial aspects of a divorce, and making the wrong decisions can mean losing on a right to certain assets or money. Having an experienced Naperville family law attorney handling your divorce could help you avoid some of the common financial pitfalls. For more information on property division and other financial issues that can affect your divorce, contact the divorce attorneys at the Roscich & Martel Law Firm, LLC for a consultation.

Source:

https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/qdro-overview

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