Divorce is difficult enough when you only look at the emotional side. Tearing a family apart is never easy on the spouses’ feelings or on the children’s. However, ending a marriage can be equally challenging on the financial side. It often means trying to maintain the same standard of living on just one income instead of two. It can also lead to a wide array of other money-related worries — which makes it no surprise that divorce and bankruptcy often go hand in hand.
However, your divorce doesn’t have to mean financial ruin for you. You can take steps to avoid the more serious landmines associated with marital dissolution and divorce settlements in New York.
A USA Today article written by the president of Spencer Capital Strategies, Wendy Spencer, discusses some of these financial traps. Here are three:
- Fighting to keep a house that is too expensive for you. Maybe you have invested a lot of time and effort into your home, or maybe you just don’t want your kids to have to move away from the place they feel safe. However, fighting to keep real estate that you can’t afford can be dangerous. In addition to the possibility of foreclosure, you could face significant tax consequences when it does come time to sell.
- Failing to consider the long-term pros and cons. Does it really make sense to give your spouse a large share of your 401(k) account in exchange for the family home? Perhaps it does and perhaps it doesn’t. This is where consulting financial and legal professionals can be invaluable, potentially saving you from a financial crisis years down the road.
- Not taking a creative view of the whole picture. A divorce settlement can address far more than merely who gets the house, the cars and the bank accounts. It can also be used to negotiate creative financial solutions. For instance, you may allow your ex-spouse to claim the children as exemptions on yearly tax returns in exchange for receiving more tangible assets.
To learn more about protecting yourself and your future during the divorce process, consider contacting an experienced family law attorney. He or she can provide valuable guidance about other mistakes to avoid during divorce. He or she can also advocate diligently for your best interests.