Divorce can present significant upheavals in a woman's life. But when it comes to the financial aspects of divorce, it's critical to adopt a dispassionate approach. Three of the most common financial mistakes women make when divorcing are failing to be prepared, not having proper information and not considering the long term. Here's how to avoid these mistakes and protect your interests.
When preparing for divorce, you should have enough money set aside to cover expenses. Even if you are not planning to divorce, it's a good idea to have some funds available in a separate account in your own name. A credit card in your own name also is advisable. Finally, before proceeding with divorce, make sure to have copies of all financial documents like tax returns and bank statements, and legal documents such as wills and deeds.
To be informed going into a divorce, you need to have knowledge of all marital assets and debts. Remember to include assets like retirement accounts, stock options and even executive perks like country club memberships. Understand the difference between marital property and your separate property, which includes things like inheritances and gifts from people other than your husband. Also, understand what you are entitled to in a divorce.
Thinking for the long term involves understanding the difference between an asset's value and its worth. An expensive home may be worth less than its value once property taxes and upkeep are factored into the value. You also need to evaluate how decisions made during divorce will impact your long-term financial security. An experienced divorce attorney can help with this evaluation.
Source: Forbes, "Three Types of Financial Mistakes Divorcing Women Make (And How to Avoid Them)," Jeff Landers, Nov. 27, 2012