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The biggest financial mistakes divorcing spouses make

On Behalf of | Apr 8, 2015 | Divorce

Sometimes estranged couples in Virginia do not realize the real financial impact of their divorce settlement until they have lived with those decisions. Whether or not they feel like their settlements are turning in their favor, they might be making one or more of the biggest mistakes that are common in divorces.

The attachment to a family home is understandable, especially if the spouses have children they do not want to uproot or one or both of them put a lot of work into maintaining and improving the home. However, many people who decide to keep the family home find it hard to keep up with the mortgage and to maintain the property by themselves. They may eventually incur significant capital gains taxes if they subsequently decide to sell the home. Some spouses seek to keep rental homes or investments without thinking about liquidation costs. If they eventually sell those former marital assets, they could also face a large tax bill. Realtor fees and other general expenses related to the sales may apply as well.

A lot of divorcing spouses consider the short-term effects of their financial decisions rather than the long-term impact. Many simply want to get the divorce over with and do not want to talk about the advantages and disadvantages. This route, however, could mean that they lose a large chunk of their savings or retirement benefits. Other spouses seem to make revenge their main goal, dragging out the divorce and causing both parties to incur high attorney bills. However, being reasonable and willing to compromise could save them from spending the financial support that they get following the divorce.

Prior to agreeing to a settlement, each party to the divorce needs to calculate and prepare for all possible eventualities. A family law attorney can provide guidance to a client who is in this situation.