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Common Mistakes Before, During, and After Your Divorce

Divorce is a difficult process to endure. Taking the necessary steps to ensure you are making the most informed decisions before, during, and after the divorce process is pertinent in protecting yourself and your assets. The following are common mistakes made by individuals going through a divorce, as well as insight on how to avoid making these mistakes yourself.

(1) Not understanding your assets and liabilities.

One of the first steps in divorce or dissolution is to get a grasp on the marital assets and liabilities. It is pertinent that you have an appreciation your assets and liabilities. You can start by collecting tax returns or request them from your accountant. Financial statements, financial applications and account statements from all retirement accounts, bank accounts, investment accounts, and creditors are vital to understanding your financial picture. When one party has no grasp on their assets, it requires more time and money spent uncovering them.

In this regard, it is also important to inventory your personal belongings, including family photos and heirlooms and items that are personal to you.

(2) Acting out of emotion.

It is no doubt that divorce can be one of the most emotionally taxing processes a person can endure during their lifetime. This extreme emotion can cloud your judgment and cause you to make decisions that are not in your best interest in the long run, including entering into a settlement agreement that may not be favorable. Obtaining legal counsel to protect your rights and help you understand the repercussions of your actions in a non-emotional manner will allow you to avoid these less-than-favorable emotionally driven decisions. Many individuals also benefit emotionally by seeking the aid of a mental health professional.

(3) Not amending your estate plan.

One area that is often overlooked during and after your divorce is how your marital status will affect your estate plan, including your will, trust, insurance and power of attorney. If an estate plan is not amended after divorce, there is a possibility that some of your assets could end up in the hands of your ex-spouse. Another consideration is that a divorce inevitably changes your financial circumstances, and your estate plan may need to change too to coincide with your new financial reality.

In some instances, it may be beneficial to amend your estate plan prior to filing for divorce, as mutual restraining orders may prevent you from during so during the pendency of the case, which in some cases can be upwards of a year.

(4) Not hiring a financial advisor.

The need for a financial advisor is heightened when faced with a divorce or having recently been divorced. A good financial advisor can assist you in organizing financial documents, understanding the tax implications of dividing assets, establishing both short and long-term financial goals, establish a post-divorce budget based on your child support and spousal support orders, and prepare a long-term wealth plan.

If you are considering filing for divorce or need assistance navigating the process, please reach out to request a consultation, call us at 216-696-1422.

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