The Top Common (But Costly) Financial Mistakes to Avoid During Divorce
For many people, divorce is time consuming and emotionally draining, which explains why some are tempted to make some considerable financial mistakes during the process. While this is understandable, we as attorneys practice in divorce and family law frequently have to address some of the financial fallout from this decision-making, which then makes the entire process that much more difficult. Below, we discuss how to avoid making the most damaging financial mistakes while going through divorce: Big Ticket Purchases First and foremost, do not let yourself go out and buy a big ticket item, like a new car or house. While these items might have been financially feasible before, you may very well find that they significantly interfere with your ability to stay on top of new finances that you are now solely responsible for. Cashing In On Investments & 401(k)s Also be careful about cashing in on investments and 401(k)s to pay the bills. Keep in mind that “cashing out” on these items could lead to substantial tax consequences; even potentially placing you in a higher tax bracket for the entire year, which can affect other payments, such as student loan payments. Also, even if you cash in on 401(k) funds that have already been taxed, you can get hit with a penalty by the IRS for cashing in on those funds before you turn 59 ½. Cashing in on your investments also means that they are (obviously) no longer be invested, which could also take you off-track from the financial goals you and your attorney mapped out for your future. When it comes to coming out of divorce positively, you want to have a solid financial plan in place. Keep in mind that, if you obtain a portion of your ex’s retirement accounts in the form of a qualified domestic relations order (QDRO), you can place this into a new IRA under your name and continue to defer paying taxes on the funds. Alimony Payments & Employment As you may know, as of January 1, 2019, the tax benefits associated with paying alimony will have effectively disappeared. If making alimony payments scares you so much that you are tempted to quit your job just to get out of it, don’t; this will simply result in more financial difficulties—and possibly more time in court. Fighting Over an Expensive Family Home One big potential mistake we see a lot of clients make is fighting over who is going to get the family home at all costs. This can sometimes be especially important to clients who feel like holding onto that home is important to their children. However, while the home may seem like your most important financial asset right now, keep in mind that the mortgage and maintenance on it may very well turn out to be way too much for one person (you). In addition, some clients find themselves in what’s known as a negative equity situation, which means that they are stuck with a house that’s worth less than what they owe on it. That can turn out to be even harder on your children, especially if all of your income goes towards your mortgage and you cannot save any of it for their college education. Contact Our Florida Divorce & Family Law Attorneys Keeping the family home and making other big decisions may very well be in your best interests; just make sure that any decision you make with significant financial repercussions are first well-vetted with your attorney so that you stick to the financial plan that’s right for you. Contact our Florida divorce attorneys at HD Law Partners today to find out how we can help you stay on track. Resource: forbes.com/sites/davidrae/2018/10/25/divorce-financial-mistakes/#553ff9207eda Tags: Tampa Divorce Lawyer, Tampa Divorce Lawyers, Tampa Family Law Attorney, Tampa Family Law Attorneys Posted in Divorce | No Comments » Connect with us Archives May 2026 April 2026 March 2026 February 2026 January 2026 December 2025 November 2025 October 2025 September 2025 July 2025 June 2025 January 2025 January 2024 December 2023 November 2023 October 2023 September 2023 August 2023 July 2023 June 2023 May 2023 April 2023 March 2023 February 2023 January 2023 December 2022 November 2022 October 2022 September 2022 August 2022 July 2022 May 2022 April 2022 March 2022 November 2021 October 2021 September 2021 August 2021 July 2021 May 2021 April 2021 March 2021 February 2021 January 2021 December 2020 November 2020 October 2020 August 2020 July 2020 June 2020 May 2020 April 2020 March 2020 February 2020 January 2020 December 2019 November 2019 October 2019 September 2019 August 2019 July 2019 June 2019 May 2019 April 2019 March 2019 February 2019 January 2019 December 2018 November 2018 October 2018 September 2018 August 2018 July 2018 June 2018 May 2018 April 2018 March 2018 February 2018 January 2018 December 2017 November 2017 October 2017 September 2017 August 2017 July 2017 June 2017 May 2017 April 2017 March 2017 February 2017 January 2017 December 2016 November 2016 October 2016 November 13 Categories Alimony Appellate Arbitration Auto Accidents Auto Insurance Business Corporate Business Insurance Law Child Custody Child Support Criminal Law Divorce Family Law FEMA Insurance Payments Florida’s Mandatory 2‑Hour Legal Professionalism CLE: Foreclosure Defense Fort Myers Hurricane Insurance Attorney General Guardianship HD Law Partners Service HOA/Property Management Homeowners Association Homeowners Insurance Hurricane Claims Hurricane Insurance Insurance Bad Faith Insurance Claims Insurance Defense Insurance Litigation Landlord Tenant Law Enforcement Liability Loan Modifications Mold Water Damage Parental Rights Paternity Personal Injury Premises Liability Law Prenuptial Agreements Private Security Property Distribution Property Owner Law Sarasota Insurance Litigation Attorney Slip Fall Tampa Business and Corporate Attorneys tampa family attorney Tampa Insurance Attorneys Timeshare Timesharing Uncategorized HD Law Partners is proud to be your trusted full-service law firm Quick Links Property & Casualty Business & Corporate Litigation Family Law Contact Us Careers Get In Touch 2002 North Lois Avenue Suite 510 Tampa, FL 33607 813-253-5333 Contact Us