Divorce can happen to Michigan couples for various reasons and be initiated by either side. When it does, couples may be facing an expensive proposition. Issues like dividing marital property and assets, attorneys' fees, child support and other legal issues can make a sizable financial impact. However, careful planning can help to minimize the inevitable reduction of financial resources.
Michigan residents contemplating divorce should avoid several common financial mistakes made by divorcing parties. One common mistake is accepting the initial demand of another spouse without considering your long-term financial well-being. Doing so may result in inequitable division of property.
Another mistake is assuming that joint debts and obligations are finalized, such as pending payments on joint credit cards and the mortgage. When these payments slip through the cracks during a divorce, ex-partners may find themselves in serious financial trouble.
Difficulty adjusting to reduced income streams after the divorce is another common problem. Divorcing partners should always keep the future financial resources in mind when negotiating an agreement.
Finally, divorcing parents often feel tempted to spend too much on children to ease the pain of divorce. It's crucial to keep a realistic financial picture foremost in mind during the process in order to avoid defaulting on child care obligations down the road.
The end of a marriage can be a challenging and financially draining experience. Planning by each party in these areas will help make the process smoother. Divorcing parties may also find it helpful to work with attorneys who offer divorce representation and prudent financial planning advice.
Source: Huffington Post, "The Five Worst Divorce Money Mistakes... And How To Prevent Them," Suzanna de Baca, July 13, 2012
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