A recent article highlights several common mistakes people make during a divorce that can cost them money. We thought we would share the mistakes and comment.
First, make sure you have all of the documents of your financial history, past, and present. Some spouses take for granted these accounts will be accurate or otherwise materialize, but that is not so – if you are going to track all of your assets, you will need to do some serious hunting of your own. To help your lawyer, you need account numbers and balances not just for checking accounts but investment accounts, mortgages, pensions, and other properties. You should run a credit check on your name and your spouse’s name and see if you find suspicious or unexpected entries that could help you find hidden assets. If you do not have all the correct financial information by the time you ink your divorce, you may not be able to recover a share of assets you find later – if you find them.
Second, remember to consider tax consequences of any settlement option. We have discussed the big change related to spousal support or maintenance in the Tax Cut and Jobs Act, but other aspects apply too – from the potential capital gains taxes in sales of homes or stock to the taxable nature of certain IRA accounts when they come to be used.
Third, try as soon as practicable to remove all joint accounts. In Missouri, courts impose an order that prohibits parties unilaterally closing accounts and generally wants the parties to wait until the divorce is final to change account status. Parties can agree in writing to closing accounts and dividing the balances, but you should do so in tandem with your attorney. By the end of the divorce, you want to make sure your name is safe and secure for credit purposes moving forward and not still saddled with a debt obligation the divorce otherwise eliminated.
Fourth, do not assume you will be going to have a big court fight and an expensive divorce. If you approach the process in as calm and rational a demeanor as possible, you and your spouse can avoid escalating into a high conflict divorce. You may even find utilizing mediation as a viable option.
Finally, do not broadcast your divorce business to others, in conversation or on social media. The more you share, the more something you say can come back to haunt you.
If you have questions about divorce, contact us – we can help.