If you have read any of my blogs or articles you know one thing for sure about me.  I tell it like it is.  I feel strongly that not enough people in the world of divorce professionals will truly tell it like it is, even if it’s not what you want to hear. So here it comes. Let me help you NOT be stupid!

I see a few things over and over again when it comes to divorce settlements that were agreed to (and sometimes even ordered by a judge!) where the people come to me after-the-fact confused and bewildered and I read through their decree and just shake my head. Please, please, please – DON’T make these mistakes!!

#3 – The settlement doesn’t take taxes into effect – AT ALL!

For heaven’s sake people, really?  We all know that Uncle Sam will dive into our pockets at every opportunity.  How could you possibly agree to a settlement without knowing the tax implications?  Many people have been stunned to find out that the tax burden on their half of the marital assets is significantly higher than their spouse’s making their “half” of the assets worth significantly less than they thought!  And DON’T expect your attorney to do this!  Attorneys are NOT accountants or financial advisors and a lot of them won’t bother to warn you of that.  Buyer beware.

#2 – Pensions are split 50/50 but no one knows what that really means.

Over and over and over I see divorce decrees that order pensions split 50/50, but no one has any idea what will actually happen.  When does the non-employee spouse start collecting?  Is there an option to take a lump sum?  Will there be a cost of living increase each year?  What if the employee spouse dies?  Will it keep paying?   When I ask these questions, no one has ANY IDEA what the answers are?  Really?  How can you possibly agree to a settlement where this piece is crucial to your retirement without knowing these details? Again, do not expect attorneys or mediators to be of much help here.

#1 – Drum Roll – The biggest stupid mistake I see is keeping a house you can’t afford.

Women especially get emotionally tied to the family home and often insist on staying.  Did they do a budget? Nope.  Did they meet with a financial planner? Nope.  Then one or two years down the road they run out of cash and realize that they can’t sell a window to put food on the table, they can’t refinance because they now don’t have enough income, and realize they have no choice but to sell.  The selling costs are about 8% of the sale, all of which WOULD have been split 50/50 with the ex if they had sold as part of the divorce. Stupid, stupid, stupid.

So listen, I know “stupid” is not a very nice word and probably ignorance is more accurate.  But please, realize what you DON’T know and bring in the right experts for your divorce to make sure that you are SMART and make the best decisions you can with ALL the information!  Don’t go this alone.  As we say at Smarter Divorce Solutions, “You only have one chance to get it right!”  Let us help.

These seem like simple mistakes, but they are incredibly valuable to get you thinking financially and looking out for your future. You can get through this, but a little help from a CDFA is a great place to start.  If you’re looking for some extra advice to make sure you are making smart financial decisions during this difficult time, simply contact our team to schedule a consultation.

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