In addition to facing an emotionally trying time, Washington residents going through a divorce are also prone to making serious financial mistakes during the proceeding. These financial mistakes can leave a person struggling to recover from divorce in a state of financial turmoil for a long time.
Prior to filing for a divorce or consulting with a family law attorney, one way to cut down on the possibility of financial mistakes is for a person to inventory thoroughly everything he or she and his or her spouse own and owe. Moreover, that person should also review several previous years' tax returns in order to get an accurate estimate of each spouse's income. Unfortunately, spouses often underestimate their own income in order to avoid higher alimony and child support payments; tax returns generally give a more accurate picture of a spouse's income.
People going in to a divorce should also realize that even if they get everything that they want financially out of the divorce, they will still need to re-evaluate both their retirement plans and their current financial planning. No matter what, divorce will almost always require a lifestyle change simply because the person's household will only have one income-earner instead of two.
When deciding upon a fair division of assets, it is very important for a divorcing person to remember that while the division may look equal on paper, such is not always the case. Investments, including homes, change in value over time and may carry tax implications with them. Moreover, certain types of marital debts, while they may appear substantial, can be compromised and paid off, sometimes for pennies on the dollar.
Not only can following these tips help a person avoid a financial pitfall after a divorce, following them can also help a person save substantially on his or her legal bills. It is always easier for a family law attorney to help his or her client when the client is fully aware of his or her financial situation and knows what he or she wants to accomplish.
Source: The Courier, "Financial concerns during a divorce," May 11, 2013