3 Financial Rules to Follow in a Divorce

Posted on: 3 June 2015

Financially negotiating with your spouse can be difficult during the divorce process. Unfortunately, it is necessary. To ensure that you get a fair shake in the process, it is important that you follow certain rules. 

Create an Accurate Budget

One of the biggest mistakes you can make is to underestimate your living expenses and income while creating a budget. A budget is very important in the early stages of the divorce process because it can help set the amount owed for temporary alimony while a more permanent agreement is reached. If you underestimate your expenses, you run the risk of not having enough money to cover your financial needs. 

To ensure you create the most accurate budge possible, work with an accountant or other financial professional. 

Be Wary of Very Generous Offers

Even though your first inclination might be to accept a very generous financial settlement offer from your spouse, you should evaluate how likely it is that he or she will actually be able to pay it. Verify all of the financial information that your spouse used to calculate how much he or she could pay. You can also ask your spouse to pay you part of it upfront. 

To further protect the financial offer you receive, use insurance and other assets for additional security. For instance, ensure that your spouse is covered by disability insurance in the event that he or she becomes disabled temporarily or permanently and is unable to work. Not only does this protect your future payments, but it provides protection for your spouse. 

Do Not Let Emotions Dictate Your Decisions

When you have an emotional attachment to an asset, it can be difficult to make a sound financial decision about its future. For instance, whereas it would be smarter to sell a vehicle that you and your spouse bought together, an emotional attachment could lead you to want to hold onto it despite the ongoing expenses associated with ownership. 

It is important that while you are deciding the fates of your assets with your spouse, you do not let your emotions get in the way of making a wise decision. Doing so could have horrible ramifications for you. For instance, if you want to keep your home, but it has little or no equity and you still have a considerable sized loan on it, you could end up financially underwater for a home that is not worth it. 

There are many other financial rules to follow in a divorce. Your attorney, one like Lois Iannone Attorney at Law, can walk you through which ones apply to your situation and help you make a sound legal and financial decision.