A divorce is an emotionally draining experience. Many divorcing spouses focus their attention on the fraught emotional aspects of the divorce—whether it’s anger, sorrow, or relief—and allow some important legal aspects to slip through their fingers. Once the final divorce judgment is in place, many newly divorced spouses confront the reality of post-divorce life with some regrets about mistakes they made when they put their financial matters on the back burner during the emotional conflicts of the divorce.
Some common financial mistakes during a divorce in Chandler or elsewhere in Arizona are avoidable if you know what you shouldn’t do during the difficult process of dividing assets and determining child support and spousal maintenance during the Arizona divorce process.
Not Planning Ahead for a Divorce in Arizona
When spouses divorce in Arizona, they can each retain assets that belong to them separately, like any account or property that was theirs alone before the marriage and not comingled with a spouse and anything they inherited during the marriage. All other accounts, assets, and property accumulated during the marriage require equitable distribution between the spouses in a way that a judge in a Chandler divorce considers fair if not necessarily 50/50.
One of the most common mistakes to avoid during a divorce in Chandler is failing to plan ahead and prepare for the division of marital assets. Before filing for divorce or responding to a divorce petition, carefully review your finances, gather relevant documents and information, and then keep them organized so they’re readily available during the process. Grouping all assets and debts into separate and marital property before beginning the process makes you much better prepared and a step ahead.
Attempting to Hide Assets
Many divorcing spouses feel naturally protective over assets they’ve earned or consider their own, but any asset accumulated during the marriage is marital property—even your income and accounts you opened in only your name during the marriage. Giving in to the temptation to hide assets, spend assets, or dispose of them before or during the divorce could result in contempt charges and a judge giving your spouse a greater portion of the assets.
Not Understanding How Debts Impact Divorce
All debts accumulated during the marriage belong to both spouses regardless of whose name is on the account. Like assets, the court divides marital debts equitably. It’s important to carefully monitor all debts after the divorce since your name may still be on accounts assigned to your spouse. If your ex-spouse neglects to make payments on a debt still bearing your name, the debtor may demand you pay the debt. Debtors don’t necessarily care that a judge gave your spouse responsibility for the debt. When a spouse fails to pay a joint debt, it can negatively affect your credit. Debtors won’t always remove your name from an account, but it pays to make calls to all debtholders and ask them to remove your name.
Keeping the Family Home If You Cannot Afford It
It’s easy to become attached to a home or to seek stability for your children by retaining the family home after a divorce, but it’s important to carefully consider what your financial situation after the divorce will be, including child support and spousal maintenance if applicable in your situation. Carefully work out your expected post-divorce income and don’t underestimate your expenses when determining whether or not keeping the home is a realistic option.
Failing to Consider the Tax Implications of Divorce
Many divorcing spouses seek the advice of financial experts and tax specialists as well as their attorneys during a divorce. Your tax situation will change dramatically after your divorce and it’s important to consider implications such as filing separately, learning when you can or cannot claim dependents, and understanding the fact that spousal maintenance (alimony) is tax deductible for the payor but taxable income for the recipient, potentially changing your tax bracket.
Ask your Chandler divorce attorney to assess your post-divorce financial situation during the divorce process and try not to let emotions rule your decisions during a vulnerable time.