What are the Most Common Financial Mistakes During Divorce In Los Angeles?
No matter how ready you are to move on, divorce is a physically, emotionally, and financially draining experience for many reasons.
Even if there are no children involved, eliminating child custody and support matters from your discussions, there is still every other detail that must be resolved before for your California divorce can be finalized.
At the Land Legal Group, our Los Angeles divorce law attorneys provide clear legal guidance for each of our clients and their unique divorce circumstances.
However, there are several financial mistakes that all divorcing couples should avoid while they traverse the legal dissolution, so they can face their futures with confidence.
Financial Mistake One: Equal Division Does Not Mean Fair Division
Most divorces are predicated on the idea that each spouse will receive property of equal monetary value.
Unfortunately, that does not always mean each will receive a truly equal share of the assets over time.
Different assets have different short and long-term values, which may not necessarily be defined by their current market value.
Our Los Angeles divorce lawyers will ensure we — and your spouse’s attorney — are comparing apples to apples when negotiating assets that will be divided. That includes their present value, future earnings, transaction costs, and the tax implications of each.
Financial Mistake Two: Trying To Hide Assets
First and foremost, hiding assets in a divorce are illegal.
Next, experienced divorce attorneys have the necessary resources and capabilities to track each spouse’s true assets and financial holdings without delay, so trusts, donations, and even cryptocurrencies cannot remain hidden for long.
If you are found to have been untruthful about your assets and hide them from your soon-to-be-ex-spouse, it will severely affect your credibility in court and give the other party an advantage in the divorce proceedings.
Financial Mistake Three: Fighting For A House You Cannot Afford
When spouses first begin their divorce proceedings, the family home is often the first point of contention.
Most people do not understand the true mortgage and maintenance costs that come with owning the property on their own.
Allow our divorce attorney to review the equity — which can be negative or positive, depending on your circumstances — tax implications, and overall financial requirements before you focus on keeping the house.
Financial Mistake Four: Avoiding Tax Implications That Effect Every Part of Your Divorce
If you have children, child support and custody are going to come with huge tax implications, which will be determined by how the parenting plan is outlined.
Even without children, there are tax implications for retirement benefits, 401(k)s, investments, home and property sales, and even spousal support changes that went into effect after January 1, 2019.
Financial Mistake Five: Giving In To Retail Therapy
Your new-found freedom can often be reflected in your appearance, which is why newly divorced people often buy new cars, clothes, or even take expensive, celebratory trips marking the beginning of their new lives.
While it is tempting to reward yourself on the new start, the long-term financial effects can be overwhelming. Single life, including shouldering all the bills — and the expenses you agreed to in the divorce — is something you should get used to before you start spending money you may need later.
If you are considering a divorce and would like to know more about how your unique circumstances transfer financially, contact our Los Angeles family law attorneys at the Land Legal Group to discuss the details of your case during a free consultation by calling 310-552-3500 today.