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Divorce mistakes that could be costly

On Behalf of | Feb 12, 2019 | Divorce

Getting a divorce in Virginia doesn’t necessarily have to be a costly process for couples parting ways. There are many factors that will ultimately determine the financial implications of a split, some of which are unavoidable. Even so, there are certain mistakes that could make ending a marriage a bit more costly than anticipated.

Over-sharing on social media while the divorce process is still going on, for example, may give the other spouse’s attorney some unintended ammo. This might involve one party claiming they can’t afford alimony payments while bragging about a recent vacation or major purpose. Not initially gathering info on such things as account numbers and balances, Social Security statements, and receipts for home improvements and other joint expenses is another possible misstep, especially since such documents may be difficult to obtain months or years later.

Ignoring tax consequences can be equally problematic for adults transiting back to a single life, as can not paying attention to the after-tax value of assets. For instance, a Roth IRA is worth more than a traditional IRA of the same value since Roth withdrawals aren’t taxed in retirement. Also, a newly single homeowner can only exclude half as much of the profits for tax purposes as a married couple can should they decide to sale the marital home. Leaving joint credit accounts open may present some surprises for former spouses since they can still be held liable for debt because creditors aren’t legally bound by divorce agreements.

Assuming a divorce will involve a court battle can be another potentially costly mistake for couples untying the knot. In some instances, a lawyer may be able to reach an agreement with mediation or similar negotiation efforts. Such arrangements are usually dependent on soon-to-be-ex spouses being able to remain civil and open enough to avoid a major dispute over property division and other issues. If couples dig their heels in, however, repeatedly having to turn to the court can become costly and time-consuming. Not every split will be an amicable one. But it can be helpful if separating spouses realize when it’s best to accept a fair settlement.