Talk to anyone who has gone through a divorce, and they will tell you it is no laughing matter. Essentially, divorce signals the death of a dream. And if children are involved, divorce basically means that your children may never share a living space with both parents for the rest of their lives.
A lot can go wrong during the divorce, especially if the process is marred by emotions. Here are three financial mistakes to avoid while dissolving your marriage.
Getting deeper in debt
Once it becomes apparent that divorce is inevitable, you need to realize that your finances will never be the same again. Until you make the necessary adjustments to your financial situation, it is important that you avoid getting into debt or long-term financial obligations. If you have not been actively involved in household budgeting, then you need to start off by creating a budget and living within your means.
Failing to have a clear account of marital assets
Divorce means separation. And part of that separation involves accounting for and dividing marital assets per Arizona marital property division law. To ensure fair distribution of marital property, it is important that both parties make full disclosure of what they own. The last thing you want is to walk out of the marriage with the burden of unshared marital debts or less than you deserve.
Overlooking the taxes
As your marital status changes, so will your tax situation. You will belong in a different tax bracket with a new filing status. It is important that you understand the tax implications of the divorce so you can make appropriate adjustments to your withholdings. You may want to consult a tax expert regarding your new tax obligation to avoid unpleasant surprises down the road.
Divorce is a significant life change that can leave you with many uncertainties. Find out how you can protect your financial rights and interests during the divorce process.