Sure, every divorce has unique attributes that make the experience different for each person. Having said that, there are a myriad of mistakes we find to commonly observe during a divorce. If you’re even considering divorce, divorce attorneys in Scottsdale recommend the following critical advance checklist to help you avoid these unnecessary issues.
Settlements That Assume Status Quo
One of the main goals of a divorce is to establish an “equitable split” of assets, which requires an understanding of your current situation and true market valuation of all your assets. At times, this necessity to focus on the present state of affairs can result in an analysis that doesn’t take into consideration potential future events. Unfortunate events can occur at any point after a divorce and may include things like job loss, disability, health changes or asset depreciation.
Complications can always arise when it comes to paying for college when a settlement agreement focuses too heavily on the maintenance of the status quo. For example, if college costs are to be split based on salary, what happens if/when you or your spouse lose your job? Unforeseen future events can put you in a difficult situation and pay for a large expense (e.g. maintenance, college tuition) you hadn’t previously planned for.
When negotiating your divorce settlement, remember to consider what might not be the same in the future. You will want to speak with your attorney or financial adviser about considering these potential changes. There are many moving parts and you should trust seasoned legal counsel to navigate you through the process.
Unrealistic Lifestyle Expectations
Divorce means there is no longer one household, but two households. The standard of living is likely to drop for both parties post-Decree. Difficult decisions about who should keep the house, or if it should be sold, have emotional, practical, and financial implications for both parties for years to come. Housing is just one of numerous lifestyle decisions faced when a divorce takes place. Unfortunately, too many divorcees expect to live a similar lifestyle in divorce, including for their children. This is a false reality—both parties are still making the same money, but now two roofs and two sets of bills must be paid. Quite often, there is simply not enough money to go around for anyone to live the same, let alone better after the divorce.
Avoiding The Details
Facing the logistics of a divorce can be exhausting, especially if it’s a complicated situation (which it usually is). Lengthy legal proceedings require you to reveal the details of your life. At the same time, you’re asked to gather a large amount of data and information to support negotiations, and this usually doesn’t end just because the divorce comes to a close. Get ready to gather documents and disclosures the likes of which even your worst mortgage refinance would have ever taken. It’s a reality and part of the process.
Lack of Financial Literacy
One of the main reasons these rampant mistakes occur during a divorce is that both parties lack even a basic financial education. Modern financial literacy is generally learned through experience rather than in school. Take time to educate yourself so you don’t run into problems. Better still, hand the entire process over to a seasoned professional who has handled hundreds of divorces before yours ever began.