How to Avoid Common Financial Errors in a Divorce

Knowing about common financial errors during a divorce may help some estranged North Carolina couples avoid making them. One common assumption is that a divorce must end up in court. However, many couples are able to reach an agreement through mediation or collaborative divorce instead of going to litigation, which may be more expensive.

Some assumptions can be costly. People may think that creditors will only pursue an ex-spouse who has agreed to pay a debt, but if it is a joint account, both may be liable. Even if there is no debt associated with a joint account, these should still be closed so that financial ties are severed after the divorce.

It is best to avoid discussing personal matters on social media. One man who bragged about closing an important deal and taking an expensive vacation undermined his claim that he could not afford a divorce settlement. Another mistake is not getting the necessary paperwork. While this is needed during divorce, it could also be needed years later. For example, if the marriage lasted 10 years or more, a person might be able to draw Social Security retirement benefits on the former spouse’s earnings history. People should also be aware of how taxes may affect the value of some assets.

In addition to property division, if there are children, the couple may have to make an agreement on child custody and visitation. Even couples who manage to successfully negotiate property division might struggle with parenting decisions. It may help parents if they keep the best interests of the child in mind just as a judge would.

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