(And How to Avoid Them)
By Rebecca Zung, LLC.
Going through a divorce can feel like an emotional roller coaster. As if going through the pain of the process itself wasn’t enough, many people unfortunately find themselves in a financial tricky situation due to common mistakes made either by their attorney or other parties involved. At this difficult time, it’s essential to make sure that you’re taking all necessary steps to protect your finances and avoid costly pitfalls down the line — after all, your future could depend on it! We’ll dive into some of the most deadly financial missteps divorce attorneys frequently make — and how to ensure they don’t happen in your case!
#1 First, leaving yourself on the hook for a mortgage after transferring ownership of your house to your partner. In the moment, it may seem like a good idea to keep the emotional attachment to the property intact, especially if there are children involved. But for example, when a father transfers the deed to the mother while keeping his name on the mortgage, he relinquishes his ownership of the house and is left with all the liability. This makes absolutely no sense and he may find himself unable to buy another home or make any major purchases due to the ongoing liability. Let’s avoid this mess — it’s time to get smart about real estate transactions.
#2 The second common error attorneys make , failing to include important details in the marital settlement agreement or requesting the judge to add them to the final judgment, especially regarding handling past jointly filed tax returns, can have disastrous consequences.
It’s crucial to have a plan in place for how to deal with joint tax liabilities, rather than leaving your ex-spouse with all the debt. Let’s avoid the messy situations and ensure a peaceful divorce settlement.
#3 Attention all non-moneyed spouses: don’t make the all-too-common mistake of waiting too long to file for temporary support! Your attorney should file for it immediately to ensure you have a way to support yourself. Waiting too long can leave you high and dry. Depending on where you live, relief can sometimes be retroactive back to when the motion was filed, even if the hearing takes place months later. So, take action now and get the financial support you deserve.
#4 Lastly, one big error is forgetting to include something in the final agreements about attorney fees. This leads to complications if one party defaults on something in the agreement. Solution? Always insert a clause that allows for fees if one party defaults. It means that if anyone has to enforce the agreement, they get fees for the job — paid for by the defaulting party. This approach incentivizes both parties to stick to the agreement while disincentivizing any shenanigans. Let’s get it right, people!
Navigating finances during and after a divorce can be one of the toughest tasks you’ll ever face. Arm yourself with knowledge so that you can avoid making costly mistakes. Be sure to understand the nuances between assets, liabilities, alimony and child support so that you can get the best outcome. Remember to take extra time of research, planning and understanding before wordlessly signing any agreement; your future self will thank you for it. Make sure your attorney is on the same page as you by openly communicating and thoroughly reviewing any agreements about the financial arrangements. Take control of your financial future by educating yourself and stepping into your power to ensure that everything is fair and protected–you deserve no less. By learning from these biggest mistakes divorce attorneys make, you are well on your way to creating a brighter financial landscape in what may first seem daunting territory.