Avoid These Financial Mistakes in Divorce

Considering that this is likely your first divorce, you're going to be faced with many decisions that will impact your financial security. You may be comfortable deciding on some issues on your own, but with some of them, it's critical that you seek advice from a Nassau County divorce lawyer and a financial professional.

Don't make these common financial mistakes in divorce, otherwise they could affect you financially for years to come.

• Underestimating your monthly expenses. While most people know how much they earn each month, they can't explain where all the money goes. Write down all of your monthly expenses and develop a realistic monthly budget. Don't forget to estimate inflation, otherwise you could underestimate your future needs and have trouble maintaining your quality of life.
• Being too attached to the marital residence. While it's nice to keep the house, especially when you have children, it may not be the best financial decision. No matter how attached you are to your home, you must be able to afford it. If you give up other assets to keep the house and you can't cover the mortgage, property taxes, and maintenance, you could end up in a bad financial situation.
• Not securing spousal and child support with insurance. Remember, your ability to collect spousal support and child support is only as good as your spouse's ability to pay them. You can ask that your spouse obtain disability and life insurance to ensure that these payments continue if your ex becomes disabled or dies.
• Not understanding that you're liable for unsecured debt. Usually, if debt was incurred during the marriage, both spouses are liable for the debt, no matter whose name is on the credit card. Don't assume that the credit card companies care what your divorce decree says; they can still come after you for payment. The best practice is to pay off all credit card debt before the divorce is finalized.
• Ignoring your long-term financial security. If you focus on getting the divorce over without considering how things will look in 10 to 20 years, you're doing yourself a disservice. If you have significant assets, it's wise to hire a financial planner to review your spouse's proposed settlement before you sign it, and to be advised on the long-term financial consequences.