Divorce Settlement Mistakes
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During a divorce settlement, the spouses are discussing various crucial topics. The state of mind is such that it is quite possible that some points slip from the mind and some mistakes are committed. Some of the precautions that should be taken to avoid mistakes are enumerated below.
Remember to avoid the Divorce Settlement Mistakes pertaining to the following advices
- Only after reading and realizing every word in the final divorce settlement and decree, should you sign it. If there are any doubts, do not feel guilty about not signing it. Ensure that you are cent percent satisfied about the wording in the divorce settlement and decree
- Along with an attorney and an accountant, you should hire a Certified Financial Planner. This Planner can impartially inspect long term proposals like tax ramifications, appreciation and budgeting of the divorce settlement to confirm that this settlement is fair to you
- If you have kids, then bear in mind that they may attend college in the future. If you desire to avoid disbursing college expenditure alone, then you must deal this issue in the divorce settlement. In some states, a non custodial parent need not assist in these expenses
- When negotiating a divorce settlement, concentrate on taxes. For example, if one partner is offered a 0.18 million USD Taxable Investment Account and other is given a 0.18 million USD Individual Retirement Account (IRA), then this is not a fair settlement. The reason is that when money is withdrawn from the IRA, taxes have to be paid
- Automobiles, Vacation homes, Boats, Residences and other assets give rise to monthly expenses. The spouses must make a post-divorce budget and then decide whether they can afford these monthly expenses. Else, it is shrewd not to claim these assets
- Some spouses abandon their career to raise the children. Hence, during divorce settlement this spouse must be offered extra money for career education and / or training
- Consider that a husband assumes some debts are jointly held. The wife must ensure that her name is cancelled from these accounts prior to the finalization of the divorce. Due to this, the credit score of the wife would not be negatively impacted, if the husband refuses to pay post divorce
- No person should assume that equal means equitable. It has been observed that usually, the husband retains the retirement / pension accounts and the wife asks for the home. Consider that both have the same present value.
However, the retirement account is a liquid asset that can continue to rise while the residence is a cost burden
- Some wives hire the same lawyer as their husband. This saves money in the short term but is not beneficial for the long term. Women regret this decision post the divorce settlement
- The custodial parent generally desires to retain the marital residence. This is emotionally right but economically problematic. The basis is that a residence is an illiquid asset that requires money for maintenance. A good solution is to sell this residence and divide the amount so obtained
- Unless the state divorce laws make it mandatory, a person must never accede to a termination date for spousal support. This person must ensure that the divorce decree mentions that this topic must be revisited in court prior to termination of payments
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