What are the Most Common Financial Mistakes California Divorcing Couples Make?
A divorce is one of the most traumatic and difficult period of a married person’s life. Many people struggle with the emotional toll. If you follow simple steps to avoid some of the most common financial pitfalls in the divorce, you can save yourself a lot a money and future drama. At Zwierzchowski & Nguyen, our divorce attorneys in Long Beach have nearly 20 years of legal experience with financial aspects of divorces and can guide you through the process, so that you avoid financial disaster. Many couples choose mediation to preserve marital assets and reach agreements out of court.
One way to ease the pressure and reduce the stress of divorce is to avoid these financial mistakes.
Here is what not to do when pursuing a divorce in California.
Do Not Fight for a Home or Property You Cannot Afford After the Divorce is Final
Our Certified Family Mediators in Los Angeles and Orange County fully understand what your family home or other property means to you — especially when you and your soon-to-be-ex-spouse share children who call that place home, too.
However, you must understand the expenses behind the property before fighting for it tooth and nail, because you may not be able to afford it on your own.
Outline the mortgage, maintenance costs, utilities, insurance, and taxes associated with the home, so you have a true accounting of the monthly and/or annual costs.
If neither of you can afford the home on your own or have no interest in keeping it, discuss the equity of the home, and its potential sale price, so you know whether the outcome is going to affect your overall finances positively or negatively.
Do Not Attempt to Hide Assets
The first thing you should know about hiding assets during a California divorce is that it is illegal.
The second thing you should know about hiding assets during a California divorce is that we will find them. Our skilled divorce attorneys have the resources and capabilities to track assets and financial holdings from trusts and donations to cash and cryptocurrencies.
The only thing you will accomplish by hiding assets is losing your credibility in court.
Do Not Ignore the Tax Implications of Your California Divorce
If you share children with your soon-to-be-ex-spouse, child custody and child support agreements are going to come with major tax implications that must be considered before you sign the final divorce papers.
Also, as of January 1, 2019, the paying spouse may no longer list spousal support payments as a deduction when filing their annual income tax return.
Beyond that, you should also consider the taxes associated with retirement benefits, 401(k)s, investments, home, and property sales, so you know where your finances ultimately stand when this chapter is behind you.
Do Not Spend Money You Do Not Have
When spouses are divorcing, they are immediately going to notice an increase in their expenses, simply from supporting separate households. However, the long-term financial effects of spending money you do not have, either by purchasing big-ticket items, clothes, trips, or other non-essential expenses with a credit card will deal a crushing blow to your future.
Hang onto your money, and avoid overspending, while you determine exactly what being single will look like financially.
Do Contact Our Experienced Divorce Attorneys in Long Beach for a Free Consultation
At Zwierzchowski & Nguyen, our certified family mediator and divorce attorneys in Long Beach will walk you through your marital finances, so you know what to expect now and going forward. Contact family law attorneys in Long Beach today by calling 562-426-6522 to learn more about your legal options, so you can begin planning your financial future with confidence.