Divorce can pose many challenges to Colorado couples, from determining custody to dividing up assets in a way that is fair for all involved. Contending with financial matters can be especially stressful in this case, as illustrated by these common divorce mistakes many couples find themselves encountering.
USA Today claims that taking a short-term approach to asset division is one major mistake that plagues numerous divorcing couples. Because the process is often fraught with significant emotional distress, decisions may not be made in a clear and rational manner. This can lead to poor financial choices, such as forgoing a share of a retirement account to instead take ownership of the family home, which can incur additional costs on its own while also greatly reducing savings necessary for retirement.
Making financial decisions based purely on spite can also impact divorcing couples. Compromise can go a long way in divorce, provided that both parties keep an open mind. Conversely, particularly contentious divorces are often drawn out affairs, which only serve to increase costs for all involved. Working through financial issues in a reasonable manner is key in this respect, as is being flexible about which assets will go to which party.
There are quite a few other divorce mistakes that can affect one’s finances according to Time. Keeping the bigger picture in mind is greatly encouraged, as financial decisions in divorce often entail a domino effect, whether due to taxes or other factors. Debt management must also be considered; in the event a former spouse fails to pay off debts as required in divorce proceedings the responsibility will ultimately fall on the account holder. Prior planning is integral in this case, such as by developing a realistic repayment strategy in case an ex-spouse neglects financial obligations.