Avoid These Costly Mistakes in Divorce
Getting divorced can be complicated as you figure out how to split a combined life. More than dividing a bank account, you have to look at everything you shared with your spouse, including assets, mortgages, credit card debt and, of course, children.
While every divorce will inevitably include elements of emotional turmoil and financial headaches, you can take steps to improve the outcome. Here are some of the costliest mistakes to avoid in divorce.
Generally, the quickest and least expensive divorces take place out of court with the help of a mediator and potentially each spouse’s attorney. If you or your spouse harbor strong ill will toward the other, you may be tempted to go straight to court, but keep in mind that costs will add up, and the final decision is entirely in the hands of the judge.
A mediator, on the other hand, can help you settle disagreements with compromises. You can still hire an attorney to advise you and even represent you at mediation meetings.
“Mediation also provides divorcing couples a lot of flexibility, in terms of making their own decisions about what works best for their family, compared with the traditional adversarial legal process, which involves a court trial where a judge makes all the decisions,” according to DivorceNet.
Forgetting About Taxes
Your tax obligations could change as you switch from filing jointly to filing as a single person, meaning there is the potential you pay more than before. Additionally, if you share children, only the custodial parent can claim them as dependents.
Until your divorce is final, you’re legally married, which means you may need to file taxes jointly if it wasn’t finalized before the end of the year. If you’ve been living separately, however, you may be able to file as head of household.
Back taxes could also be an issue, as you’ll both be responsible for their payment, but the amount owed will likely depend on how much money income you each contributed during the tax period.
Misunderstanding Assets and Debt
If you sell your house, the taxes will come out of how much you each make after paying off the mortgage. You’ll also have to pay capital gains taxes on any investments you sell, such as bonds, stocks, artwork, or other high value assets.
Arizona is a community property state, which means a court will generally divide any property equally between you and your spouse.
“If one spouse wants to keep more property or assets, such as one spouse keeping the family home, that person will generally have to compensate the other spouse, so the division represents a 50/50 split,” according to local law firm DeShon Laraye Pullen PLC.
The same idea goes for any debts you and your spouse took on while you were married. Debts are usually split, and settling them may require selling something you own together for one spouse to pay off half the balance.
Going It Alone
Your divorce attorney is key to keeping the process fair and moving along smoothly. Additionally, you might ask for help from a therapist, tax consultant and, in cases of domestic violence, law enforcement professional. Using the right expert ensures your attorney is focused on the legalities of your divorce.
If you are going through a divorce, the attorneys at DeShon Laraye Pullen can help you navigate through all the necessary details. Visit DeShonPullenLaw.com or call (602) 252.1968 for more information and to schedule an initial consultation.