Even for the most amicable couples, ending a marriage is an emotional event. While you and your soon-to-be former spouse want to negotiate a divorce settlement without going to court, you may still have some trouble separating the emotional side of the divorce from the business side, which involves dividing your marital property.
Few people enjoy dragging out these types of matters. Instead, they want to get through it as quickly as possible, and no one could blame you if you feel this way. However, you may want to slow down and make sure that you cover all of the issues. If you miss some financial matters, you could jeopardize your post-divorce future.
Watch out for these common financial pitfalls
As you begin going through your marital assets and other finances, you may want to take care not to fall into any of the common financial pitfalls mentioned below:
- Don't forget to address any unsecured debt the two of you share. If you have personal loans, credit cards or other similar debt, make sure that they are paid, or at least attempt to remove the name of the party who won't be assuming the debt as part of the divorce.
- It may be tempting to use your retirement or other investment accounts to pay off bills so that each of you can walk away with little to no debt. However, you could incur a substantial tax obligation for doing so.
- Make sure you understand the big picture by considering everything as a whole before addressing each asset and debt. You could miss something vital that could cost you dearly at some point in the future.
- Don't forget that you will have extra expenses. The same amount of money you lived on together now has to support two households.
- If you and your future former spouse decide to sell the family home and split the proceeds, you remain liable for the mortgage loan, taxes and other household expenses until the sale is final.
- Speaking of the house, try to avoid wanting to keep it purely for emotional reasons. The financial obligations that come with a house might not be feasible now that you will be living on just one income.
The other mistake many people going through divorce forget to do is create a post-divorce budget. You need to know what you will have coming in and what will need to go out as you decide property division issues. Forgetting this step could hurt your financial future. One way to help you avoid missing important financial matters during your divorce is to consult with an experienced Pennsylvania divorce attorney.