No couple gets married with the intention of one day ending the marriage. According to recent statistics, however, over half of all marriages in Texas and across the country end in divorce. Divorce can definitely be psychologically and emotionally challenging, and it can also be a very expensive process. Here are a few financial mistakes to avoid when going through a divorce.
In order to pay for divorce expenses, some people will cash in their investments. They do this with the intention of putting the money back when the dust settles. However, liquidating an investment that has appreciated is a taxable event, possibly costing more money in the long run. It’s always good to become familiar with tax laws, as these can change frequently. For example, spouses who pay alimony used to get a tax deduction, but new tax laws have eliminated this tax break.
The house is often a common source of dispute among couples who are divorcing, as a house is commonly looked upon as an asset. However, owning a home can be very expensive. If keeping the house creates a financial strain, it may be best to let it go. Make sure to consider all options when deciding what to do with the home.
Having a financial plan is always recommended. The lack of a budget or some sort of financial plan is one of the most common and biggest mistakes made by those going through a divorce. A financial plan could prevent disastrous mistakes. Divorce can definitely be a confusing time, but Texas residents who have questions regarding any aspect of divorce could greatly benefit by seeking the services of an experienced and knowledgeable attorney.