Divorce isn’t only a major legal decision — it’s also a major financial one. Unfortunately, any missteps can cost you thousands of dollars. The choices you make now could shape the outcome of your entire case.
Before you take that next step, you’ll want to educate yourself on the pitfalls that could jeopardize your future. From financial missteps to legal blunders, understanding what to avoid before you file can save time, money, and unnecessary stress.
What are Some of the Most Expensive Divorce Mistakes People Make?
People often make serious financial and legal mistakes when facing a divorce simply because they don’t know any better. Some decisions seem logical at the moment, but unfortunately, they can have long-lasting consequences.
1. Making Financial Moves Without Legal Advice
It’s natural to want to protect yourself financially when you are divorcing. But in the haste for protection, some spouses drain joint bank accounts or even try to hide assets. Others quit their jobs to avoid alimony payments. Courts take a dim view of these financial maneuvers. If a judge views your actions as an attempt to manipulate the process, you could find yourself on the losing end of financial awards.
Before making any significant financial moves, you should understand what is legally permissible. An experienced family law attorney will consider your financial situation and help you take a lawful and strategic approach to protecting your interests without taking unnecessary risks.
2. Assuming Assets Will Be Split 50/50
Splitting marital assets in a divorce is part of the process. But a common misconception is that these assets are divided equally. In reality, courts divide assets based on state laws. For instance, equitable contribution states aim to divide assets fairly based on many factors, such as financial contributions, both parties’ needs, and the length of the marriage. But this division doesn’t have to be 50/50.
You should educate yourself about your state’s asset division laws and work with an experienced attorney to understand how that would look to the court in your situation. When you understand these legal parameters, you can approach financial negotiations with the right expectations.
3. Ignoring Tax Implications
Divorce doesn’t just affect you in the moment. It also affects you at tax time or when you sell an asset in the future. Decisions made regarding property division, retirement accounts, and spousal support can all come with tax burdens. For instance, dividing retirement assets incorrectly can trigger early withdrawal penalties and hefty taxes. Many spouses accept settlement terms that look good on paper but leave them in a difficult financial position because of taxes they didn’t anticipate.
Getting legal counsel is essential to evaluate any possible tax implications before finalizing any agreements. Professional guidance and proper planning can save you thousands of dollars and prevent unnecessary future financial strain.
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What Should You Do BEFORE You File for Divorce to Get Your Financial Ducks in a Row?
Before filing for divorce, you should take proactive steps so you can be in a stronger position and prepare for what is ahead.
1. Gather and Organize Your Financial Documents
Courts require full financial disclosure in a divorce and missing documents or a lack of transparency can delay proceedings and also put you at a disadvantage during negotiations. In anticipation, gather your bank statements, tax returns, credit reports, real property deeds, mortgage statements, investment accounts, and retirement fund details. Having these records available will make the disclosure process smoother. If your spouse always handled the finances, now is the time to educate yourself on your financial picture so you come to the process more knowledgeable.
2. Understand Your Assets and Debts
While many people assume they know what they own, many marital assets – and debts – are more complicated than they appear. Knowing which assets and debts are marital and which are separate is a fundamental first step. For instance, if you or your spouse owned your home before you were married, it may be considered separate property unless the other spouse helped pay the mortgage or maintain the house while you were married. This is considered “commingling” assets. Likewise, debt incurred during your marriage may be considered a shared responsibility, even if the credit card is in one name. You will want to meet with an experienced family law attorney or financial professional to assess your marital estate and what you are entitled to in your divorce.
3. Open Individual Bank Accounts
Divorcing couples often remain financially entangled far too long, which can complicate things and create unnecessary conflict. While you don’t want to make drastic financial mores without legal advice, it’s wise to begin establishing your financial independence. Spouses should open separate bank accounts in their own names and begin depositing income into these separate accounts. Furthermore, if you don’t have a credit card in your own name, now is the time to apply for one so you can build your own credit history.
4. Avoid Making Emotional Decisions
Divorce is a highly emotional process, so this may be difficult. Unfortunately, many spouses make impulsive financial decisions during this time that they later regret. Rushing into a settlement, quick buyouts, or giving up important assets just to get it over can leave you struggling financially. Try to stay practical and strategic. Let your attorney guide negotiations so you don’t walk away with less than you deserve.
What are Some Legal Pitfalls That Could Hurt Your Divorce Case?
Navigating a divorce isn’t just about protecting your finances. You must also stay on the right side of legal protocols. Even minor missteps could create major complications. Many people unknowingly damage their own cases by making what seem to be harmless choices. By understanding these, you can avoid taking actions that could inadvertently weaken your case.
1. Moving Out of the Marital Home Too Soon
When tensions rise, one spouse may feel it best to move out for the sake of peace. And while this seems logical and may even be a necessary decision, moving out too soon could negatively impact your property division or custody arrangements. Before making any living arrangement changes, consult with your attorney to understand how moving out might affect your case.
2. Posting About Your Divorce on Social Media
In today’s digital world, people are used to sharing their personal lives online. However, when it comes to divorce, social media posts can become a dangerous weapon. Anything you post online, whether it’s a comment about your ex, financial bragging, or pictures from a vacation, can be used against you in court. Photos or posts can suggest irresponsible behavior and cause the court to consider whether you may not be able to provide stability for your children. Furthermore, sharing details about proceedings, financial settlements, or personal grievances can have legal consequences. Even innocent posts can be used to damage your credibility, so it is best to stay off social media while navigating a divorce.
3. Violating Temporary Court Orders
The court may issue temporary orders during your divorce to establish rules regarding custody, spousal support, property use, or financial obligations while your case is ongoing. These orders are legally binding, and even unintentionally violating them can have serious consequences.
- If you have failed to comply with a temporary child custody and visitation order, even if you believe it’s in your child’s best interests, it can weaken your custody case.
- If you are ordered to pay child support or alimony, missing these payments can result in legal penalties, wage garnishment, or even contempt of court charges.
- If a restraining or property use order is in place, violating its terms – such as returning to the marital home without permission – can result in fines, legal sanctions, or even criminal charges.
It is imperative to follow court orders to the letter. If you believe an order is unfair or needs to be modified, you will want to work with your attorney to formally request a change instead of taking the matter into your own hands.
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What are Some Myths About Divorce That Could Potentially Cost You?
Many people walk into the divorce process with false assumptions, some of which can result in costly mistakes, unnecessary conflict, and unrealistic expectations.
Myth #1: The Court Always Sides with the Wife
For a long time, there has been a widespread belief that courts are biased in favor of wives, particularly when it comes to custody and financial support. This often leads husbands to assume they have little chance of securing favorable outcomes in a divorce case. However, modern family laws recognize many factors when making decisions and don’t favor one gender over the other. For instance:
- Fair division of marital assets is based on financial (and nonfinancial) contributions to the marriage and both parties’ needs.
- Child custody arrangements prioritize the best interests of the child rather than outdated gender roles.
- Spousal and child support decisions are based on each spouse’s income, financial dependency, custody arrangements, and state guidelines, not gender.
In fact, today, more fathers are securing joint or full custody than in previous generations. Because courts recognize that children benefit from having both parents involved, custody decisions are based on caregiving history, financial stability, and the ability to co-parent. Each spouse should strategize their case with the help of a family law attorney who understands how courts make these decisions.
Myth #2: “If My Spouse Cheated, I Will Get Everything”
Adultery is a painful betrayal, no doubt, and many people assume if a spouse is unfaithful, the court will grant them more property, money, or custody rights as a result. While marital cheating will have serious emotional and personal consequences, it rarely has a significant impact on a divorce settlement, especially in the case of a no-fault divorce. Exceptions to this are:
- If one spouse has used marital funds to support their affair, the court may award more assets to compensate the other for this financial loss.
- Adultery may impact a spousal support award when marital misconduct can be considered by the court.
- If the spouse’s new relationship negatively affects their children, such as exposing them to inappropriate situations, it may influence the court’s custody decisions.
Unless adultery is the grounds for a divorce, one spouse’s infidelity may secure a fairer financial or custody arrangement for the other, but the court is not going to use this information to punish the adulterous spouse for their behavior.
Myth #3: “I Don’t Need a Lawyer – Our Divorce is Amicable”
Hiring a family law attorney may seem unnecessary for couples who believe their divorce will be friendly, quick, and uncomplicated. They assume as long as they agree on all the major terms of their settlement, they can simply sign some paperwork and move on. However, even the most amicable divorce situations can involve significant legal and financial considerations. What seems like a simple solution today can result in major problems down the road. Without legal guidance, spouses can unknowingly sign away valuable rights, such as claims to retirement accounts, fair child support arrangements, or future financial protections.
In a low-cost or DIY divorce, things can go very wrong:
- Spouses may agree to divide assets “fairly” but fail to consider the tax implications, debts, or their future financial stability.
- Without proper legal documentation, agreements may be unenforceable if one spouse fails to comply with them.
- Even in a “friendly” divorce, one spouse may have financial details the other is unaware of – intentionally or unintentionally.
Even if spouses agree on most issues, consulting an attorney to review the agreement and financial disclosures before finalizing may prevent future regrets.
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Protect Your Future by Getting Legal Guidance Before Filing for Divorce
Divorce is one of the most significant legal and financial decisions you will ever make. And the choices you make could seriously impact your financial stability and your rights as a parent. Having the right legal team ensures you avoid making costly mistakes and secure a fair settlement.
At Melone Hatley, P.C., our experienced family law attorneys are here to protect your interests every step of the way. We provide personalized legal strategies, ensuring you are protected against financial pitfalls and legal mistakes. Before you file, get the legal guidance you need to make informed and strategic decisions. Call us at (800) 479 – 8124 or contact us through our website to schedule a free consultation with one of our Client Services Coordinators.
Schedule a call with one of our client services coordinators today.
