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Top Financial Mistakes To Avoid During A Divorce

by | Dec 3, 2021 | Alimony, Child Support, Complex Property Division, Divorce, Family Law, High Asset Divorces, Spousal Support

Face it, divorce is a gut-wrenching experience at best.  Often our clients are blind sided by infidelity or given an “I’m not in love with you anymore” speech from the person they expected to be their partner for life.  The grief is profound and paralyzing.  Nonetheless, you are somehow expected to pull it together and make important financial decisions that may affect you your family the rest of your life.”

We can help with your divorce.  Call the Law Offices of Paul F. Sherman at (503) 223-8441 or Contact Us for a free divorce consultation.

One of the best ways to regain your sense of self identity is to minimize the financial damage of a divorce and place yourself in the best possible position to start over. Here are a few mistakes you should avoid during the divorce process:

AVOID RUSHING TO GET THE DIVORCE OVER  

Often clients want their soon-to-be-ex out of their lives as quickly as possible.  This is especially true when the divorce involves physical, emotional or financial abuse.

The problem with rushing the divorce process is it can lead to an unfair division of assets for the more vulnerable spouse.  People often take advantage of the other party’s desire to get things over with quick and convince them to leave the relationship quickly with less than they deserve and without the support they need to start over.

Marriage, especially one that is long-term, creates a complex legal and intermingling that can be difficult and painful to sort out.  Preliminarily, we encourage our clients to ensure their safety.  After that, it is important to go through the proper steps of the dissolution process and to locate and properly value all of the assets and liabilities with the assistance of skilled professional help.

REFUSING TO ATTEMPT MEDIATION OR ARBITRATION. 

Alternative Dispute Resolution (ADR) is often an effective manner to resolve issues presented by a divorce.  This is especially true with the assistance of counsel.  Mediation and arbitration are two types of alternative dispute resolution that often lead to successful results.

ADR often allows each spouse to retain more control over the outcome of their case and to keep family matters private rather than leaving the decision to a judge and allowing the details of your marital estate to be placed in public court records.  Our offices can help you properly work your case up to obtain the best possible settlement for your case. 

IMPROPERLY VALUING MARITAL ASSETS AND LIABILITIES. 

Large marital estates and complex assets present special problems.  Property can be valued in different ways.  It is important to seek professional advice regarding valuation of major assets and liabilities to insure they are divided fairly.  A mediator, arbitrator or settlement judge can then examine the valuation and help insure a fair division.

It may also be necessary to determine the change in value of a marital asset that has changed in value during the marriage.  This is especially true with regards to assets purchased prior to the marriage and then contributed to by both spouses during the marriage.  A common example is the family home.  Our offices can help you obtain what you are entitled to with regards to these assets.

FAILING TO LOCATE HIDDEN ASSETS

Often our clients have been married to an over-controlling spouse who maintains control over all of the parties’ assets.  Here it is especially important to have assistance in discovering hidden assets or other monies that are not included in the marital estate.  Often one spouse attempts to keep more than their fair share of marital assets in a divorce.  Having an attorney who specializes in the discovery of hidden assets can help you obtain what you are entitled to in a divorce.  This is especially true in larger estates with complex property issues such as retirement accounts, stock options, family owned businesses and the like.

Our office can also obtain a court order requiring your spouse to produce documentation with regards the marital estate.  With proper assistance, financial institutions will be required to produce records held in separate accounts.

TAKING AN UNFAIR SHARE OF MARITAL DEBTS.

Often a person facing divorce will overlook or take an unproportionate share of marital debt to get a divorce over quickly.  This can lead to financial ruin and bankruptcy.

It is important to have a solid understanding of the marital debt incurred by the parties.  It is unfair to be saddled with inappropriate spending by the other spouse.  Obtaining copies of each spouse’s credit report will often uncover hidden consumer debts such as credit cards, auto loans, student loans, personal loans and mortgage debt.  Identifying hidden marital liabilities and tax consequences is essential so that marital debt can be allocated appropriately to avoid liability on debts incurred by your spouse.  Often our clients have no idea the debt even existed.  It is essential to uncover these problems then allocate the marital debt properly.

FAILING TO OBTAIN YOUR FAIR SHARE OF RETIREMENT ASSETS.

Spouses commonly have their own retirement accounts.  There may be significant differences in the amount of assets in each account.  This is especially true where there is a large disparity in the income/earning capacity of one spouse over the other. 

The use of a qualified domestic relations order allows the court to divide retirement plans fairly in the divorce.  Proper division of retirement assets is essential to avoid early withdrawal penalties and tax consequences that can occur with improper planning and distribution.  As a general rule, parties to a long-term marriage are entitled to 50% of the other parties’ retirement benefits accrued during the marriage. This can be a substantial sum of money.  It is important that the value of the asset be identified and properly valued to obtain a fair result.

FAILING TO CONSIDER THE LONG-TERM CONSEQUENCES OF SPOUSAL AND CHILD SUPPORT

Divorcing couples must consider the long-term consequences of spousal support and child support to ensure long-term financial stability.  Thinking long term is especially important where there is large disparity in earning capacity between the parties or one of the parties is disabled and unable to work. 

ATTEMPTING TO HANDLE YOUR OWN DIVORCE

Face it, handling your own divorce is a terrible idea.  Regardless of your education, attempting to handle complex legal and financial matters that you are not an expert in will produce disastrous results.  Other important assets are not properly divided or are not included in the divorce judgment.  These failures can have a significant affect on your future and often cannot be remedied after the fact.

Our offices can help you get a fair result.  Even in an amicable divorce, it is important to have professional advice to ensure that all assets and liabilities are accounted for and included in the divorce documents.

CONTACT PAUL F. SHERMAN FOR EXPERT ADVICE ON YOUR DIVORCE CASE AND GET THE RESULTS YOU AND YOUR FAMILY DESERVE

This may be your first divorce.  At the Law Offices of Paul F. Sherman, we have over thirty years of experience in handling divorce and family law matters.  We are experts in helping our clients obtain the best possible outcome for their cases.  We know the latest developments in family law and have substantial experience how the law is applied to your specific case.  We know what to expect from the court system.  We know what it takes to get your case handled correctly.  You do not have to go through one of life’s hardest experiences alone. 

We know you have questions and we have answers.  If you would like to know more about the dissolution process, call the Law Offices of Paul F. Sherman at (503) 223-8441 or Contact Us for a free divorce consultation.