In our most recent article, we discussed some financial mistakes that some people make in the run-up to their divorces finalizing, but we really only scratched the surface. It was based on an article we ran across recently, detailing 10 mistakes to avoid while getting divorced that could have a lingering effect on your finances. The overarching message from the first set of mistakes we highlighted last time is you don’t want to do anything that would be looked at unfavorably by the courts, be it moves that would adversely affect your credit score, spending lavishly, or making moves to change wills and life insurance policies.
There’s a whole other set of mistakes the author identified that could be grouped around the idea of being prepared for your divorce — with the mistakes, of course, having to do with being unprepared or slow to prepare.
One of the items they pointed out is one that we can definitely help you with — knowing your state’s divorce laws and acting accordingly. The article pointed out that Texas is one of a handful of community property states, meaning that — as the author defined it, “anything you’ve acquired during your marriage is considered joint property that belongs to you and your partner equally.”
While that’s true, there are also assets that could be considered separate property that don’t need to be divided in your decree. Working with an experienced family law team like the one at the Law Office of Lisa A. Vance will allow you to know what is and isn’t considered community property in your marital estate.
The article also pointed out the importance of preparing your financial documentation as you’re planning to get divorce, noting that it’s a mistake if you don’t do that. There’s no getting around it — as divorce is a legal process that determines how to divide your assets and debts, you have to produce financial documentation in order for the courts to determine who’s entitled to what.
The longer you drag your feet on getting bank statements, credit card statements, mortgage documents, and other documents pertaining to your assets and debts, the longer it’ll take to get your divorce moving — especially if you’re looking to litigate and want to secure a court date for that. It can also make your divorce more expensive if you’re not doing that homework – while a family law team can get the needed documentation on your behalf should it come to that, it’ll cost you to have that happen.
The article also points out that you should consider the tax implications of whatever financial decisions you’re making. As the author points out, “There are all sorts of tax-related issues you’ll have to solve, from whether your attorney fees are tax-deductible, to which of you will get the tax exemption for your dependents. Child support is non-taxable, but only if it’s been officially decreed during your divorce settlement.”
And while child support is non-taxable, spousal support can be taxable, which is something you want to factor in if you’re eligible for spousal support and wish to pursue it in your case.
The author also makes a final interesting point about being honest with yourself during the divorce process — and how not being honest is a mistake. We’d absolutely agree with that, and pivoting from that, that means knowing at the outset what outcomes you’re looking for from your divorce.
If you have certain assets you want, or certain goals you have, it might behoove you to go an alternative dispute resolution route and negotiate with your soon-to-be-ex rather than try to win it in court.
If you do decide to litigate, being honest with yourself and with your lawyer is paramount. If there’s an issue that you don’t disclose to your lawyer that could adversely affect your case, it could blindside your lawyer in the courtroom, color your judge’s decision, and have lasting effects on you and your finances. If your lawyer knows your full situation, even the parts that might be embarrassing, that will at least help your lawyer be prepared should that come up in the courtroom.
At the Law Office of Lisa A. Vance, we’re here to help you with your case, and to guide you past the financial mistakes that some divorcing people make. If you’re looking to move toward the best post-divorce life possible, our initial consultation will help you determine the best path to take and the next steps toward that journey.