Mistakes That Can Reduce Your Divorce Settlement

20 April 2018
 Categories: , Blog

It is not just the divorce laws that determine how much of your marital assets you can walk away with during divorce, even your actions have a role to play. For example, the following mistakes can reduce your divorce settlement.

Ignoring Professional Appraisers

There are assets that you can appraise on your own, such as the used car you recently bought for a few thousands of dollars or money in your savings account. But there are also assets that you need to appraise to know their true value, which is necessary for equitable distribution. Such assets may include your marital home, your spouse's business, your artwork collection, or your shares and stocks, among other things.

Using Your Lawyer for Everything

Another mistake is to use your divorce lawyer to handle every little task associated with your divorce. Divorce lawyers typically charge by the house, which means the more tasks you give them, the more you will have to pay them. For example, it would be a mistake to set a meeting with your lawyer to request their help to appraise your family business. It would also be a mistake to set meetings with your lawyer to complain about your spouse.

Not Factoring In Tax Issues

The IRS is your common enemy if you are divorcing, and you should treat it as such. This means you should figure out which of the assets you will be dividing will be taxed, as well as their respective taxation rates. This will help you determine the net value (that is, the value minus taxation) of every asset so that you know exactly what you are getting. You don't want to end up with a second home with a huge capital gains tax and huge tax bill without knowing about the taxation bit.

Insisting On the Family Home If You Have Custody

Some people are of the idea that the parent who gets physical custody of the kids or who gets to stay with them most of the time deserves the marital home. The rationale is that having the marital home gives the kids some semblance of normalcy. This is not bad if you can afford the house, but fighting for the marital home just because you have physical custody is a bad idea. What if the house ends up being too costly (in terms of maintenance, taxes, and the assets you gave up for it) for you?

Of course, an experienced divorce lawyer knows about all these mistakes. This means you aren't likely to make a mistake if you hire a lawyer and listen to their advice.