Most people considering divorce want to act carefully to protect themselves. Concerns about financial and custody consequences for divorce often necessitate careful strategy.
Unfortunately, some of the financial decisions that might seem the most common sense and logical in the weeks before a divorce might actually be dangerous mistakes that could impact your divorce proceedings. The following three mistakes are some of the most common financial errors people commit when considering divorce.
Don’t open a secret bank account
It is surprisingly common for people who plan to divorce to start hiding money from their spouse. On the one hand, building up a nest egg to support you as you transition to independent living seems reasonable.
On the other hand, the assets you want to use for your safety net are likely marital property. Unless you have a prenuptial agreement designating some of your income or assets as your own, your spouse has a claim to a share of those assets that you plan to set aside for yourself.
If the courts or your ex discover those hidden resources, you could wind up not only losing those assets but penalized for hiding them.
Don’t give away personal property or sell it
If you know you will likely move out of your marital home, you might not want to take every outfit and piece of furniture that belongs to you. Getting rid of those possessions now by either selling them or giving them to others could make moving easier.
Unless you share the proceeds with your spouse or get their approval for the sale of those assets, they might be able to claim that you dissipated marital property to reduce the value of the marital estate and therefore what they will receive in the divorce.
Be conscientious about your spending, especially for personal purposes
A little retail therapy might make you feel better when it seems like the world is about to crash down on top of you. Unfortunately, racking up debt or spending marital assets for your own enjoyment toward the end of the relationship could affect property division.
If your ex can reasonably claim that your actions benefited you and not the household, the courts might eventually reduce your share of the marital estate according to the amount of debt that you accrued or leave you solely responsible for those bills.
Before you make any major money moves leading up to your divorce, getting good advice about financial decisions from an attorney at Bowen Ten Long & Bal, PC before you make them can help you avoid hurting your outcome in the property division process.