Ending a marriage requires planning and caution. But spouses make common mistakes while undergoing divorce that you should avoid.
First, stay silent on social media during divorce. The habit of posting everything on social media may have few consequences during marriage. It can be major problem when undergoing divorce.
For example, posts about an expensive vacation or purchase can weaken your position while negotiating support. Certain social activities can impact child custody.
Beginning divorce without getting important documents and paperwork is another common error. Once this process starts, the other spouse may not provide important financial information.
As quickly as possible, gather account numbers and balances for all of your accounts, Social Security statements with your spouse’s earnings records and anticipated future benefits, amounts paid for major assets such as your house and vehicles, and home repair receipts. This information is also helpful for future retirement and tax planning and claiming Social Security benefits from a former spouse’s wage records.
Never forget that your divorce decisions have tax consequences. Investments may grow in in value that could lead to a large tax bill for the spouse who receives them.
A married person can avoid taxes on up to $500,000 of home sale profit while a single person can exclude only $250,000. Spousal support is no longer deductible by the payer or reportable by the recipient spouse.
Leaving joint accounts open is another large error. Even if one spouse assumes responsibility for a debt, the other spouse may be liable if their name is on the account. Creditors are not bound by divorce agreements if the credit agreement predates the couple’s separation. Couples should close joint accounts, take authorized users off credit cards and transfer debt to new accounts or loans strictly in the responsible spouse’s name.
It is also wrong to fight over every issue and assume that battling it out in court is inevitable. Seeking common ground and settlements can save time, stress, and money.
Other options include off-the-record mediation in front of a third party who can assist with fashioning a resolution. Collaborative divorce involves a team of professionals who can help negotiate a fair resolution.
An attorney can help spouses come up with ways to deal with divorce legal issues. They can also help assure that their rights are protected in settlement and legal proceedings.
