Divorce will inevitably change many aspects of one’s life, especially when it comes to finances. Many New Jersey residents aren’t prepared for the financial negotiations that are often required during a divorce. Understanding the financial implications of divorce and being aware of mistakes that some people make during negotiations can help one maintain financial stability after the divorce is finalized.
Avoid these mistakes
Some people go into a divorce without realizing that they may have to make some major lifestyle changes. This may involve looking for a higher-paying job, downsizing a home, or living on a stricter budget. The family home is often a point of contention, and many couples fail to make the right financial decisions based on their emotional attachment to the house. Not making sound financial decisions based on one’s new lifestyle can cause financial strain, which can add to an already stressful situation.
The post-divorce tax situation may include the need to value assets gained or lost. When brokerage accounts or retirement accounts are involved in a divorce settlement, it can be a mistake to not seek professional help if one doesn’t understand the tax implications. Estate plans should be updated soon after a divorce is finalized to reflect one’s new financial situation.
The legalities of divorce can be complicated
It’s important for those going through a divorce to prepare themselves for changes to their finances and other aspects of life. This may involve selling the family home, updating an estate plan, and making significant changes to one’s lifestyle. All these changes can be overwhelming so it’s helpful to consult a New Jersey family law attorney to understand how best to navigate the divorce process.