Partner
Divorce brings major upheaval in the lives of both spouses, no matter how simple or amicable it is. The decisions that the husband or wife make during the divorce process could affect their well-being for years into the future. This is especially the case with respect to financial matters. If a divorce is on your horizon, LaFountain & Wollman P.C. is ready to get to work protecting your legal rights. We can also counsel you about ways to avoid some of the most common financial mistakes of divorce.
Mistake 1: Not Considering the Tax Consequences
Certain aspects of your divorce may have tax consequences or need to be handled in a way to avoid or minimize such issues. Payments, property transfers, and retirement plans – and the way they are addressed during the divorce – can potentially be taxable events if the agreement or court judgment is poorly drafted. There are rules and guidelines to protect individuals from paying more taxes than they should, but correctly drafting court papers is essential to take advantage of them.
Mistake 2: Refusing To Make the Most of Mediation
Before going to court to litigate your divorce, it’s a good idea to try mediation. Unfortunately, not all spouses give mediation the attention and respect it deserves. When used properly, mediation can at the very least save the spouses money by avoiding an expensive trial. It can also help them negotiate more financially favorable settlements. For instance, a spouse could potentially negotiate the sale of the former marital residence and claim a share of the net proceeds that, in turn, serve as a down payment for a new home.
Mistake 3: Ignoring the Possibility of Hidden Assets
One could easily be led to believe that after several years of marriage, they know their spouse pretty well. In reality, many husbands and wives live double lives marked by hiding income, property, and other assets. Trusts, overseas accounts, moving assets to family and friends for temporary safekeeping – these are all ways that assets get hidden. Working on the side or under the table for cash is another example.
Mistake 4: Being Unfairly Held Responsible For Marital Debt
In the same way that one spouse may be unaware of the other’s hidden assets, there are situations in which unknown marital debts accumulate for years. A spouse may be shocked to learn, for instance, that his or her wife or husband has been running up credit card debt for quite some time. It’s possible that the other, innocent spouse can be held responsible for debt they did not even know about. If your spouse was secretly using credit cards and amassing significant debt, you need to ask your attorney about having the divorce judge order the spouse to pay what he or she incurred.
Mistake 5: Improperly Valuing Marital Assets
Before the court decides how to divide the spouses’ marital assets, it needs to determine the value of the property in question. Not understanding the value of complex assets like a family business or retirement can leave you with less than you deserve. For instance, the other spouse may try to argue that the family business they want out of the divorce is not worth very much, so they still deserve additional assets for the sake of an equitable distribution. In reality, the business may be worth quite a lot; so, to be fair, you should receive the bulk of the remaining assets. Your attorney can work with appraisers and other experts to make sure all marital property is fairly valued.
A Mistake You Don’t Want To Make: Handling Your Own Divorce
Perhaps the biggest mistake of all is failing to hire an experienced family lawyer to represent you during your divorce. The right lawyer will understand the state’s domestic statutes and other relevant laws and how to use them to protect your interests. Don’t cheat yourself out of the fair financial treatment you deserve. Call LaFountain & Wollman P.C. today.