For many individuals, going through a divorce is an emotionally taxing and mentally draining experience. It often feels like a period of being emotionally frozen, mentally numb, or even moving in slow motion. Despite grappling with this emotional and mental turmoil, you'll still be required to meticulously examine your finances to ensure a fair and equitable settlement agreement. However, navigating this financial aspect can be especially challenging when dealing with the overwhelming emotions that come with divorce.

 Even if you believe you are thinking clearly, it's crucial to be aware of some of the most common financial mistakes that people make during the divorce process.

1. Be Realistic About Post-Divorce Expenses.

During divorce proceedings, you'll need to provide a financial affidavit detailing your anticipated post-divorce expenses. It's crucial to be thorough and realistic, including everything from healthcare deductibles to upcoming home repairs. Even a $200 monthly underestimation can translate to $2,400 annually, potentially leading to financial strain if you're the primary breadwinner. Seek assistance from a Certified Divorce Financial Analyst™ to ensure accuracy and prevent costly mistakes.

2. Relying Solely on Your Attorney: Legal Expertise vs. Financial Know-How.

 It's important to recognize that your attorney is a legal expert, not a financial one. Just as you wouldn't consult your doctor for car advice, it's unrealistic to expect your attorney to be a financial wizard. While your attorney will guide you through the legal aspects, their role primarily revolves around having you complete a financial affidavit and assuming its accuracy.

 One common mistake is undervaluing assets, particularly pensions, which can be a marriage's most valuable asset. Attorneys often accept a pension's present value statement as the correct marital property value, but this can be far from accurate. To ensure proper valuation and consider tax implications, it's advisable to enlist the expertise of a Certified Divorce Financial Analyst™ (CDFA™).
 
3. Don't Miss Tax Deductions in Divorce.

 Many are unaware that fees for attorneys and CDFA™ services in divorce can be tax-deductible. These deductions apply to expenses related to obtaining alimony, retirement funds, and QDROs. Additionally, while it may change soon, currently, spousal maintenance is taxable to the recipient and tax-deductible for the payer, making it crucial to consider these tax implications when crafting your settlement.

 4. Avoid Relying Solely on Attorneys.

 The more you and your spouse can resolve through direct communication, the more you can save on legal fees. While it's understandable that some couples can't stand to be in the same room due to emotional strain, it's essential to consider the financial implications. When attorneys act as intermediaries, relaying information back and forth, it can cost you upwards of $600 per hour, and this approach doesn't make sense for anyone involved. It's worth setting aside any anger and engaging in constructive dialogue to find mutually agreeable solutions.



5. Guard Against Emotional Decision-Making in Divorce.

 During a divorce, it's common for people to want to rush through the process just to get it over with. However, making decisions purely based on this desire can lead to financial hardship and even bankruptcy down the road. A 50/50 split of assets is seldom genuinely equitable. It's crucial to set emotions aside, engage in open communication with your spouse, take the time to fully grasp your post-divorce future, and seek guidance from the right experts to ensure a fair and informed settlement.