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Avoiding common financial pitfalls in the divorce process

The economic downturn of the past few years has impacted Dallas families in a number of ways. Perhaps one of the less obvious ways has been causing married couples to put off a divorce in favor of the relative economic stability they may still have in their marriage, regardless of their emotions. With an improving stock market and other signs of recovery today, some may be reassessing whether they have reached the end of a marriage.

It's true that the divorce process contains some potential financial pitfalls. One of these is overlooking assets and liabilities, particularly easy to do when just one spouse is in charge of the household budget and finances. Going through a divorce without having a full, clear picture of the family assets could result in an unfair division of property.

Divorcing spouses should also try to establish realistic expectations of the kinds of expenses they'll have to manage on their own after the split. Clothing, food and other necessities, as well as the cost of individual health insurance, could prove to be an unexpected challenge on a single income. They also have to try to avoid a "revenge" mentality in approaching property division. An intentionally and unnecessarily prolonged legal battle is likely to end up reducing the total amount both parties will eventually have available to split.

An experienced legal professional, however, will offer advice geared towards protecting one's interests and the bottom line at the end of the divorce process. Another potentially tricky point in that process can be the question of who gets to keep the house; we'll look at this in more depth in a follow-up post.

Source: The Wall Street Journal, "Divorce and Money: Six Costly Mistakes," Veronica Dagher, May 15, 2015

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