During a divorce, there can be many financial decisions you have to make and prepare properly for your post-divorce future. Don’t become a financial victim with a divorce. Divorces are an emotional time for most of the spouses and below are some common mistakes they make that you should avoid:
1. Don’t Be In Dark About Your Finances:
Whether the bank accounts, credit cards or tax returns make copies of these documents, read them and understand the documents and your financial situation during the marriage and seek the right professional help.
2. Insurance, Investments And Bank Accounts:
There is a lot of insurance that comes into play the most prominent being health and life insurance. It is one of the added expenses that most people seem to forget. Life insurance is important if there are children involved, whether or you are receiving support or giving the support you want to ensure that in the event of untimely passing away of any spouse the children would continue to receive their support.
3. Changing Beneficiaries And Will:
Just because you are getting a divorce doesn’t mean your will and nomination would change automatically. Change your will right away just to make sure your assets are going to the right people.
4. Assets Can Be Easily Divided:
One of the biggest misunderstandings in the mind of the spouses is that if a property is named under them, then they are the sole owner far from reality. According to the law, both spouses are equal owners of even if the property is named under a single owner. Instead of wasting time resolving ownership issues, both parties should know that existing assets can be easily divided.
5. Planning Financial Settlements:
In the event of a divorce, financial settlements must be done much earlier. If you leave the matters until the end, then there can be a lot of issues that will lead to financial loss.
6. Loan And Debt:
Paying loans or debt becomes one of the biggest unresolved issues between spouses after a divorce. The best way to handle this is by clearing all the debts by prepaying from current savings so it won't become an unnecessary issue in the future.
7. Legal Expenses:
The complete legal procedure for divorce in India is a long, stressful and expensive. So it would be much better for the spouses if they mutually arrive at a financial settlement with the help of their family members and a legal counselor. This way they can save a lot of legal expenses.
8. Paying EMI:
This is a common mistake that most people do but avoid. There are a lot of financial and legal calculations to be made here, so I suggest you take the help of a financial expert before taking any further steps.
9. Trying To Avoid Alimony:
Many people try a lot of things to avoid alimony the worst being quitting your job but while it would seem like a great idea, it would only more time in court and more money on legal expenses.
10. Not Taking Care Of The Paperwork:
You never know what documents related to your divorce settlement down the road so it's always advisable to make copies of all the paperwork and keep it with you.
11. Make A Post-Divorce Financial Budget:
People underestimate the expenses they would incur or their financial situation after divorce, so in this situation, it is important to do necessary financial planning.
While there are different problems in different cases, the few listed above are some of the most common financial mistakes people do in a divorce settlement. Taking any wrong step can severely affect your financial status, so it is always better to make financial decisions logically and not emotionally.
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