Fights about money are one of the most common factors that drive couples to divorce. Partners going through separation can let their emotions cloud their sense of financial judgment, and may end up deeply in debt. These are some of the most frequently made financial mistakes during divorce:
Not Dividing Up Property
Depending on the circumstances of the split, one partner may feel so fed up that he or she may move out and agree that the other spouse keep all of the possessions. This can be bad financial choice because the initial abdication of rights can prevent a partner from getting these possessions back during the formal divorce proceedings. If these are high-value goods, the couple may be forced to sell the item and split the money in order to ensure equity.
Forgetting to Split Retirement Savings
When thinking about the total assets, couples may initially only look at their household goods and bank accounts. However, key parts of a family’s savings are generally held in retirement or investment accounts. If one partner took time off work to raise children (and therefore may not have a large nest egg of his or her own), the other spouse may be legally obliged to give the caretaker spouse up to half or the total retirement savings.
Neglecting Good Budgeting
The logistical difficulties of divorce may mean that one partner racks up debt when purchasing their own set of furnishings and housewares. This may leave both partners in a precarious situation if they share credit cards or other lines of credit. In the event of a lengthy divorce proceeding, one partner’s poor budgeting may mean that the other spouse will be financially liable for a portion of the bills.
The skilled legal team at Moreno Family Law has decades of experience helping Californians emerge from divorce in the best financial situation possible. If you are concerned about property division and asset protection, call our San Jose office today at (408) 266-9011 to see how we can help.