The unfortunate reality is that most of us have a friend or family member who have faced the “D” word – Divorce. As of 2020, one of the largest age groups making the decision to part ways is the Baby Boomer Generation. Later in life divorces present a much more complex unraveling of two lives. If you married in your twenties or thirties, chances are you have accumulated most of your life savings together. You built careers, families, and your financial futures together. This can lead to a tangled mess that needs to be divided.

At Alternative Divorce Solutions, we work with couples who are facing later in life divorces frequently. In some cases, we collaborate with couples to mediate the financial aspects of their divorce as an unbiased third party, a “Financial Neutral”. In other cases, we work with just one side, as a “Financial Advocate”, to help that individual have confidence in their decisions. We show them what different divorce settlements would look like for their future. We also work with individuals post-divorce to build the best strategy for their new financial life.

It is through this work that we see common mistakes being made during the divorce process. If the unexpected happens to you, take some time to be sure you don’t make the same mistakes that others have made.

1. Underestimating your expenses: The last thing you will want to do is start pulling credit card and banking statements to determine what you spend on a regular basis. However, this can be one of the most essential parts of building your financial case during your divorce. Take it seriously and ask a professional for help if needed.

2. Assuming that dividing everything 50/50 is fair and equitable: Not all assets are worth what they say on the statement. How is that possible?! Well consider that some investments may need to be liquidated for things like a down payment on a new home. In this case, many investments such as annuities, life insurance and retirement plans have rules about how the money can be taken out and what penalties, fees and taxes will be applied.

3. Not knowing the impact of taxes: Assets are not all created equal, especially when taxes are involved. Be sure you know the difference in taxes between qualified assets, non-qualified assets, and non-qualified tax deferred assets. All these assets have different rules regarding taxes and how they can be divided.

4. Failing to consider the long-term impacts of your settlement: The financial decisions you make during your divorce may affect you for the rest of your life. Be sure that you fully understand the long-term ramifications of accepting a settlement offer before you say “yes”. Consider seeking guidance from a financial professional to help you navigate these decisions.

5. Forgetting that you are the decision maker: Don’t let someone talk you into a financial settlement that you can’t live with. You have a voice and should be heard. Don’t let anyone push you around. That includes your spouse, your attorney, your friends or even your kids.

If you, or someone you care about, are experiencing the turmoil of divorce, consider seeking guidance from a Certified Divorce Financial Analyst® to help answer your questions today.

© 2020 Alternitive Divorce Solutions

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