Divorce may be common these days, but it is still a traumatic event. During this time, it is easy to make a financial mistake that can haunt you for years – either from impulsive emotional decisions, bad advice, ignorance, or just plain enmity.Here are five financial mistakes to avoid as you prepare for your new, single life.
Not Understanding Financial Obligations – If one spouse took care of all financial matters, the other spouse may not know where to begin to protect their own interests – and a divorce is not the best time to expect cooperation and clarification.For example, you need your own copies of the previous year’s tax returns (assuming you filed jointly) and other important co-signed documents such as mortgage papers. Make sure you also know of all joint unsecured debt (such as credit cards) that you could be liable for. It is important to know every last thing that you could be financially responsible for. If it takes a lawyer, forensic accountant, or Tony Soprano to extract this from your soon-to-be ex, so be it. (Well, maybe not Tony Soprano.)You need to have a comprehensive picture of your finances, including how taxes will be handled for the year of your divorce, and it is essential to get a handle on what your new expenses are likely to be.A visit to a financial planner or similar professional can give you a clear and objective opinion at a time when you need it most. Do not agree to anything in a knee-jerk fashion without understanding the financial ramifications.
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