You’re not sure how you’re going to get along financially after your divorce, but you’re sure it won’t be that difficult. After all, you still have a job and a place to live, and you’re going to divide all of your assets evenly before you split. Now, you’re only going to have your own bills to worry about instead of shared costs.
Unfortunately, many divorcing couples assume that these things are true, leaving them to agree to a divorce settlement that they regret signing months or even years later.
Consider These Common Divorce Mistakes BEFORE Dividing Your Assets
- Don’t ignore the numbers. Too many ex-spouses assume that they will have enough money after a divorce to take care of their monthly bills—without ever examining their finances. They may overestimate their income, underestimate their expenses, fail to plan out a monthly budget, or forget that the cost of many expenses will change over the coming years.
- Custodial parents are not “owed” the house. Many couples often decide that the custodial parent will keep the house and continue living there, usually to avoid the headache of moving. However, the parent who retains the children is not always able to afford the house payments, property taxes, and other costs of keeping the home—leaving them bankrupt by what they believed was a financial asset.
- Your debts are not paid. While a divorce is an ending to your marriage, many credit card companies and other debt collectors can still call you demanding payment for a shared credit card account. This is because credit card debt is unsecured, meaning you will share liability for the unpaid balance equally with your ex-spouse even after divorce. You can divide responsibility for unpaid debt in your settlement, or you can pay off all shared debt before the divorce is finalized.
- “Fair” and “equal” are not the same. You may be tempted to trade item-for-item with your ex, assuming that a car is a car and a boat is a boat. However, many shared items will vary dramatically in monetary value, and one car may be worth three or four smaller vehicles. Make your decisions on market—or projected—values of each item, not on a one-to-one basis.