North Carolina family law attorneys of Gailor, Wallis & Hunt discuss the impact of financial blunders made during divorce process
Working through the divorce process is an unfortunate but necessary task that can consume a substantial amount of your time. Even if you and your estranged spouse are able to avoid litigation by way of mediation or arbitration, the divorce process still requires the spouses involved to obtain a substantial amount of information regarding income and assets as well as prepare for negotiations and meetings with attorneys, mediators and/or arbitrators. Despite the fact the parties are experiencing emotional turbulence and personal turmoil, they are also required to focus intensely on legal and financial matters. Divorce 360, an online guide for those in the throes of separation and divorce, offers several points of advice for handling money and assets during a divorce.
Divorce 360 published the article “Divorcing? 15 Costly Financial Mistakes” in order to point out costly oversights that divorcing spouses often overlook during this tumultuous time.
The North Carolina divorce attorneys of Gailor, Wallis and Hunt reference this article to highlight and explain common missteps and blunders they have seen over the years.
The first step to avoiding financial pitfalls during and after divorce is to preventatively protect your assets. According to Divorce 360, if you suspect your spouse is considering a separation or that you make seek a separation, you should make copies of all your separate and joint financial records. This includes account statements and information that relates to your marital lifestyle. If there is a possibility that your spouse may liquidate or hide marital assets, and a separation has occurred or is imminent, you may be able to obtain a court-ordered restraining order to preserve and/or “freeze” money and assets. Keeping a close eye on your finances at the inception of the divorce process ensures that you are aware of what is being changed or taken.
It is also important to understand the tax implications that may accompany the division of assets in a divorce. For instance , the Divorce 360 article offers the following example: “Say your spouse handles all the investments and offers to split them 50/50. Sounds fair? …” Maybe not. Look at the net after tax value of the investments you will receive relative to what your spouse will receive. Some investments reap larger rewards, while some are more heavily taxed. For stock to be equally divided, each party should receive an equal cost basis in the stock.
Another issue the Raleigh family lawyers often see is the transference of emotional value to assets. The house the two of you purchased, your pensions earned over the years and artwork in which you invested may fill you with sentimental feelings for the good times, or leave you consumed with indignation and remorse. Either way, these items are of value and need to be looked at on a financially objective basis. Do not fight over something that has a low return on investment just because of an emotional attachment. Likewise, do not give up a high-yielding investment on the basis that it bears negative sentiments. Remember, feelings fade. Ultimately, despite the emotions present during a separation and divorce, the division of assets and income should be treated objectively, based on facts – not emotions.
Once the divorce process is final and you feel you have reached satisfactory end goals, make sure to update your estate documents accordingly. According to Divorce 360, “After heavily contested divorces, many people forget to change the beneficiaries on their life insurance policies, IRA’s and will.” This failure can result in a complete loss of everything you attempted to protect in the divorce settlement. If you forget to change the beneficiaries of your will, your former spouse may end up receiving the estate you intended to leave to your children, new spouse or other organization. Or ,if you forget to change the beneficiaries on your life insurance, your former spouse may receive an unintended windfall.
The North Carolina family lawyers of Gailor, Wallis and Hunt explain the dissolution of a marriage is never easy. The firm’s lawyers have dedicated their lives to helping men and women work through the divorce process, and are knowledgeable and experienced in all aspects of family law. Whether a family law client’s case can be resolved by an out-of-court settlement or whether litigation is required to achieve resolution, the lawyers of Gailor, Wallis and Hunt will provide competent, focused and dedicated representation.
Divorce is tough, so are we
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