Navigating a divorce can be extremely complicated. This is especially true if you have to deal with issues such as custody and high-value property division. If you do not take appropriate steps to take care of your financial interests, you could find yourself with less than you need. When you are starting over after a marriage, doing so in a secure economic position can reduce the stress that comes with a divorce.
If you are considering divorce and you and your husband have accumulated some high-value assets during the course of your marriage, it is time to take steps to protect yourself. In addition to seeking advice from accounting and finance professionals, you should also talk with an experienced divorce attorney in the Alpharetta area as soon as possible. In order to protect your assets, avoid the following three financial mistakes people make during a divorce.
1. Not having a complete list of assets
When going through a divorce, many people do not take the time to search for all assets that may be subject to the state's property division laws. If the settlement is missing assets and you agree to the terms, you may not be able to claim your share of those assets in the future. Sit down and make a list of all the assets, account numbers and passwords that you know about. Search through prior year tax returns to see if there are sources of income you do not have access to. Also, consider hiring an investigator to find any assets that your husband may be hiding.
2. Not considering tax value
When you have a combination of taxable assets and nontaxable assets, it is important to consider how pretax and post-tax dollars affect the value of the assets. For example, if you have a traditional IRA, it is not subject to taxes until the distribution period begins. That means that if you have a $600,000 value on the account, it will actually be worth less since, in the future, it will be reduced by the deferred tax liability.
3. Waiting to separate your finances
Once you have decided to divorce, it is time to start separating your finances. When a couple decides to divorce, it is common for one spouse to empty out a joint account without the other's knowledge. Even if you think it is unlikely your husband would do this, it is usually better to not leave issues like this to chance. If you have not done so already, open your own bank account, apply for your own credit card and start unlinking joint debts.
There are many more things you can do to protect your interests when you are preparing for a divorce. Speak with an attorney as soon as possible to find out more about what you can do to avoid losing your share of assets as a result of the divorce.