Separation Mistakes That Could End Up Costing You Money
Divorce can be one of the most difficult and emotional experiences. Often, individuals may make mistakes during the separation that could lead to financial burdens down the road. There are numerous financial pitfalls that individuals can fall into before, during, or after a separation, and these mistakes can sometimes cost people a significant amount of money. If you're in this unfortunate situation, what do you need to be careful about?
Failing To Obtain A Prenuptial Agreement
One of the biggest mistakes that people can make is not getting a prenuptial agreement. This type of agreement outlines how the couple's assets will be distributed if they divorce. Without a prenup, a couple could spend thousands of dollars on litigation and endure long, stressful and bitter negotiations. Property division is not the only reason to obtain a prenup. If children are involved, a prenuptial agreement can outline custody and child-related expenses to avoid future disputes.
Hiding assets from your partner during a separation is unfair and illegal. The court may view hiding assets as an act of fraud, and you could face significant fines as a result. Assets that could be hidden include bank accounts, investments and other sources of income. Be honest about your assets, and don't hide any of them from your partner or the court.
Not Keeping A Close Eye On Joint Accounts
Joint accounts can create issues during a separation. Many people fail to monitor their joint accounts closely, assuming that their partner is using the account correctly. Unfortunately, this is not always the case, and the other party could use the account without your knowledge, causing financial strain. Keeping separate accounts and monitoring transactions can help avoid this problem and reduce financial stress.
Not Seeking Professional Help
Going through a separation is an emotional process, and you should not go through it alone. You may need professional help from a financial advisor or an accountant to guide you through the process. A financial advisor can help you ensure that your finances are in order and that you have the resources to move forward, while an accountant can help you navigate tax-related pitfalls.
Not Hiring An Attorney
Most people, especially those who assume or hope for a "friendly" separation, avoid hiring an attorney to reduce costs. This, however, can turn out to be a costly mistake. A family lawyer can guide you through the separation process and help ensure that your rights are protected. In some cases, individuals who do not hire an attorney end up losing significant amounts of their assets or even their reputation. If you haven't engaged the services of a solicitor yet, do so as soon as possible.