News that a spouse wants a divorce may come as a surprise and can take a social, emotional and legal toll on the other partner. Often, the financial impact of divorce is greatest for women. Experts have studied the mistakes women tend to make during marriage and divorce that may result in unfavorable financial situations post-divorce.
During the divorce and separation process, spouses need to settle various family issues, like custody of children, as well as property division. This may result in major life changes, especially in the couple's financial situation. California couples need to be aware of the common financial mistakes that women make when it comes to divorce or family law in order to prevent the continuation of these mistakes.
Generally, women are prone to financial blunders during a divorce because they are not prepared, not well-informed and are not considering long-term financial plans, according to experts.
Experts warn that spouses should be financially ready for divorce, whether they are planning it or not. A spouse may reserve a budget for expected divorce expenses. Additionally, he or she might consider owning a sole account for future expenses that the other spouse cannot access. Copies of financial papers and records, such as bank account, titles, deeds, wills and other documents should be obtained and protected. Spouses should be knowledgeable about their marital assets and properties to ensure they can protect them when it comes time to divide marital property.
Spouses should know whether they live in a community property state, like California, or equitable distribution state. Knowing the difference enables a spouse to anticipate how and if assets or property can be divided. Couples should also be aware of any hidden assets, incomes or debt incurred by the other partner. Most importantly, one should carefully assess settlement offers to ensure they support long-term financial stability.
Settling a divorce is never easy and varies by case and by state. But preparing a financial plan can help in the event of divorce or separation. Women can benefit from learning and understanding their financial situation and seeking help from a professional who can devise a plan and create a smoother divorce process.
Source: Forbes, "Three Types of Financial Mistakes Divorcing Women Make (And How to Avoid Them)," Jeff Landers, Nov. 27, 2012