Divorce is a stressful process. The division of assets and debts during the divorce process can easily bring out the worst in people.
If you are going through a divorce, you will want to be apprised of your rights, devise a proper strategy to keep your emotions in check, and to maintain realistic expectations when it comes to your preserving your net worth. The following secrets have been provided by top divorce attorneys to assist you during the divorce process:
1. Don’t Let Emotions Lead Your Financial Decisions
Hurt feelings may lead to foolish battles over who gets the $50 coffee table, for example. Anger and spite can result in the spending of thousands of dollars of attorney’s fees. Make thoughtful decisions over what is worth fighting for as opposed to what is worth picking a fight over. Know what you value most when going through a divorce. In other words, pick your battles
2. Everything Is Divisible and Is Fair Game
Don’t make the mistake of assuming that certain assets are not fair game to claim because they are in your spouse’s name and not your name. When dividing assets during divorce, almost everything is up for divisibility, including credit cards, frequent flyer miles, royalties, etc.
3. Make Big Purchases Before Filing for Divorce
Most states prohibit big purchases and liquidating assets after the divorce is filed, if not ordered by the court or agreed upon. If necessary, consider engaging in a big buy before finalizing the divorce.
4. Gather Key Evidence Before Filing for Divorce
There may be moments leading up to a divorce where you want to walk out the door and never look back. However, it is best to remain patient under the same roof as your spouse and gather specific financial evidence before the split. You will want to be as prepared and knowledgeable as possible about the financial situation of your marriage. Make copies of tax returns, account statements, credit card statement, etc. Preparation is key.
5. Get Property Valued Before You Part Ways
Almost all property is divisible upon divorce. It is best to know the value of a home, business, car and other property as early as possible. Consider hiring an expert to appraise a property or do a quick Zillow search on the current value. Do your homework to come out ahead.
6. Don’t Hide Assets
Hiding assets during a divorce is frowned upon by the court. Attempting to deceive the opposing party and/or judge will diminish your credibility and may lead to monetary penalties and/or an unequal division of assets. Protect yourself by disclosing all assets early in the divorce process.
7. Get Job Training or Update Your Education Before Filing
If you have played the very important role as a stay-at- home parent, supported by your spouse, consider freshening up your resume and education before settling a divorce. In many cases, if minor children are in the picture and you are not retired or disabled, the court will expect you to work and not depend entirely on spousal support. If accessible, furthering your education and gaining work experience prior to divorce can be beneficial in the long run.
8. Familiarize Yourself With Your Finances Before You Split
If one spouse has been in control of household income, you will want to get to know your finances before stepping into a courtroom. Consider hiring a professional to assess your individual finances and guide you to make informed decisions.
9. Consider Mediating Your Divorce
Mediation can be an efficient way to cut down on expenses that would normally accrue during a litigated and contested divorce. A mediator facilitates an agreement between the parties. This is a good option to consider if you want to protect your privacy, not have to set foot in a courtroom, and to keep legal fees manageable.
10. Know What Is Your Biggest Asset
It may be obvious to assume that the marital residence is the biggest asset. However, a retirement account or pension account is very often the most valuable asset, even in the value will not be realized until the future when it is paid out. The process of dividing a retirement account usually requires a special court order called a qualified domestic relation order (QDRO). You will want to ensure that this is completed at the time or shortly after your divorce action has been completed so that you receive your portion of retirement benefits.
11. Understand Debt Obligations
Debt obligations are not joint in some states. In many states, once the divorce is filed, you are not responsible for debt that is not in your name. Unless joint responsibility is agreed upon in the settlement agreement, you are responsible for your personal debt only. In Nevada, however, debts remain a community obligation until the divorce has been finalized.
12. Don’t Forget About Beneficiary Designations
Failure to remove beneficiary designations can lead to paying out benefits to your former spouse. Revise beneficiary designations as soon as possible to prevent this from happening.
13. Pay Court-Ordered Attorney Fees
It is normal for the court to order one spouse to pay the other spouse’s attorney fees once the divorce is finalized. There can be serious consequences if there is failure to pay court-order attorney fees, including jail time.
14. Design a Joint Parenting Arrangement Wisely
After divorce, it is common for the custodial parent – the parent the child spends more than half the year with – to claim the child as a dependent for tax purposes. However, the non-custodial parent may claim the child as a dependent if he or she provided half of the child support. Claiming a child on taxes can be beneficial to the filer. It is crucial that you and your spouse sort out an agreement regarding who will claim the child as a dependent upon divorce. If you enter into a joint custody agreement, it is reasonable to alternate the dependent deduction on a yearly basis.
15. When in Doubt, Seek a Professional — Or It May Cost You
Seek professional legal help from the very beginning of the divorce process. Lack of proper knowledge and strategy at the onset of a divorce action can cost you thousands of dollars in the long run.