Focus …. You Need Focus!
Divorce is a long, involved process that is emotionally and financially draining. The challenges along the way can be daunting and many people find it easier to agree to any terms presented to them, no matter how potentially disadvantageous, just to get the divorce process over quickly.
Focus is key in avoiding this pitfall.
How do you keep your eye on the ball, so to speak? It is important to have a plan - more specifically a financial plan so you keep all of your moves and actions in line with your end goal. A plan helps you avoid mistakes that could negatively affect your future.
By engaging the services of a Certified Divorce Financial Analyst® (CDFA®), such as Griffin Divorce Consulting. A CDFA® will help make the process easier for you and your divorce attorney by helping you review your options and understand how your financial decisions impact your future.
Mistakes to Avoid During the Divorce Process
Mistake 1: Being Unprepared
This might seem like an unfair statement, because really, how do you ever prepare for a divorce? It’s not as if you go into a marriage with the thought of its dissolution constantly at the back of your mind.
However, there are ways to prepare so you are better equipped to handle the “process of divorce”. How do you do this?
- Have your own money. Even if you are not considering divorce, it is always best to be in control of your own finances. This includes maintaining a bank account and credit card under your own name. If divorce is imminent, setting aside funds for expenses as soon as possible is important.
- Have your own copies of financial documents. This includes tax returns, financial statements such as bank and brokerage account statements, credit card statements, loan applications, wills and trusts, list of insurance and corresponding policies, vehicle titles, property deeds and similar documents. And keep in mind, it doesn’t matter whose name is on the account. It is still considered community property and you need to have documentation of the account.
All of these will be required by the courts during the divorce process. Additionally, these records help your Certified Divorce Financial Analyst® (CDFA®) when you make your financial plans for the future.
Mistake 2: Not Sticking To A Budget
When you are used to a certain lifestyle during a marriage, it can be difficult to adjust to new changes in spending habits. However, budgets are there for a purpose and could spell the difference between bankruptcy and a financially secure future.
Mistake 3: Being Uninformed
“What you don’t know won’t hurt you.” In this case, what you don’t know has the potential to hurt you and your future. The best way to protect yourself is to arm yourself with knowledge. Your lawyer will guide you through the legal matters and your Certified Divorce Financial Analyst® will help you through all the financial issues. Together we can keep you informed of your options, but it helps that you are aware of things that could affect your future.
- Know what you own and what you owe. Again, knowing this information will help in understanding options and drawing up the divorce settlement.
- Understanding your assets. Knowing which things are included as assets during divorce, how assets are classified, and how they are affected when talking about division of assets and property is important.
Separate property, for example, are those acquired before the marriage. Separate property can also include inheritance and gifts from people other than your husband. These are not included in the division of assets. Having a list of what you own separately will ensure that these assets remain solely yours.
Community property are those assets that are jointly owned or acquired during marriage and thus are subject to the laws governing division of assets.
Division of assets can be complicated. Having some understanding of what you are entitled to will help protect you as you go through the divorce process.
Mistake 4: Being Short Sighted
Some things might seem like a good idea initially but might not be financially beneficial in the long run. Therefore, it is important to analyze how your decisions will affect your future financially, not only in the short run, but many years down the line.
For example, you may have an emotional attachment to the family home because that is where you raised your children and you’d like to stay there. However, if the mortgage and maintenance of the home is not affordable for you, then it may be a better choice to sell it to preserve your financial stability.
This is where the services of a Certified Divorce Financial Analyst® (CDFA®) become really helpful. A CDFA® is able to present to you financial implications of various settlement options so you are able to choose what you think will be best for your individual circumstance, short term and in the future.
Take Control of Your Future
When you consider divorce, or if you know someone who is contemplating divorce, one of the biggest realities for those in the divorce process is the financial settlement and financial analysis post-divorce. Get the assistance Betty Azmoon, a Certified Divorce Financial Analyst® (CDFA®) and CFF® Certified Financial Fiduciary.
Betty provides step-by-step guidance on matters related to divorce. With a wide range of experience and expertise related to divorce issues, Betty will simplify the process and provide much-needed clarity in areas such as long-term tax consequences, asset, and debt analysis, dividing pension plans, continued health care coverage, stock option elections, protecting support with life insurance, and much more.