Common Financial Mistakes in Divorce
After you've done your divorce planning, attempted to make some decisions with your spouse, and then begin the divorce process begins, it is not unusual for one - or both parties to a divorce action, by the fifth or sixth month, to become impatient. Quite often, when settlement proposals begin, litigants become tempted to just sign the agreement in order to get the divorce over with.
While some lawyers may consider this "stall, and wear out the other side" tactic a secret, but for the spouse being taken advantage of, it's a big mistake. Think about it: even if everything looks fair and equitable on the face, you may not really be getting a good deal. It's understandable that most people don't have an understanding about divorce finances, so consider these tips:
1. Don't disregard how inflation can impact your divorce settlement. Consider the cost of a child's college education - or even retirement - 15 or 20 years down the road.
2. Remember to update your estate planning documents. After a divorce battle, it's easy to forget details like changing the beneficiaries on your life insurance policy or will.
3. You must insure what you've agreed to in your settlement. In Massachusetts, support terminates at death; accordingly, make sure that life insurance is an issue covered in your agreement.
4. Understand the difference between survival and merger when it comes to support. Simply stated, some portions of a divorce agreement can be changed later, others cannot.
Provisions of an agreement that "survive" have an independent life of their own; they cannot be modified later - even if there is a change in circumstances.
Alternatively, a provision that merges has the ability to be modified at any point when the moving party can demonstrate a change in circumstances. The only requirement is one must file a Complaint for Modification.
5. Hidden Assets: Don't forget to have your attorney or financial analyst assess the issue of whether assets may be under-reported or missing - especially if there's the element of a family business involved. You may consider engaging the services of a private investigator or forensic accountant.
Finally, make certain that you educate yourself on those tax ramifications relating to a divorce settlement, retirement accounts, and those involving stock options. Taking these extra precautionary steps will ensure that you're setting yourself up for a secure future post-divorce. Contact us for a no-obligation consultation.

















