Financial mistakes people make when getting divorced are:
- Using financial settlement negotiations as revenge. For instance, you may feel that since your spouse cheated on you, you want to bankrupt them. As much as you may want to seek revenge – don’t. It could end up costing you in the long run.
- Forgetting that you are the decision-maker. Don’t let someone talk you into a financial settlement that you can’t live with. You have a voice and should be heard. Don’t let anyone push you around. That includes your spouse, your attorney, your friends or even your kids.
- Trading the wrong kind of asset in an unbalanced way. For example, a common mistake is trading a pension benefit in retirement for the marital home. The house is an ongoing expense – a liability. The pension benefit is an asset. We can show you the financial projections under different scenarios, so you can make an informed decision.
- Not knowing the impact of taxes. Not all assets are created equal, especially when taxes are involved. Be sure you know the difference in taxes between qualified assets, non-qualified assets, and non-qualified tax-deferred assets. All these assets have different rules regarding taxes and how they can be divided.
- Throwing in the towel. Saying things like “I give up, you can have whatever you want.” Or “I’m afraid I will lose everything, so I will take whatever you will give me.” It’s a mistake and it could cost you a lifetime of savings.
- Not taking the data gathering process seriously. A shoebox full of receipts and a shrug of the shoulders will probably end poorly. Be prepared – and if you need help getting organized, contact my office and ask to speak with an advisor.
- Wanting guarantees and certainty. This comes from the fear of not knowing what’s next. What if he dies? What if she decides she wants more money? What if the stock market goes down? While few things in life are guaranteed, through proper financial planning and running projections of your finances under a multitude of scenarios, we can help you understand the real risks and how to reduce them.
We have found that individuals who understand the financial aspects of the divorce process are much more likely to feel empowered to divorce with financial confidence. If you want help, contact our office and request a complimentary initial consultation.
Alyssa Feldmeyer Miller, CDFA® is a Financial Planning Specialist from Feldmeyer Financial Group, a private wealth advisory practice of Ameriprise Financial Services, Inc. For more information, please visit the Feldmeyer Financial Group Divorce Magazine online profile.
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