Divorce is a watershed moment, where all events in your life are often thought of as what came before and what came after. The divorce will mean making some very important and sometimes challenging decisions, including what is best for your children, whether to switch careers, or where to live, just to name a few. Financial decisions during divorce are among some of the most important, as the financial decisions you make during the divorce can impact your life for years to come. There are some important financial mistakes you need to keep in mind and try to avoid.
First, you need to have a solid understanding of your income and your expenses, as failure to have a realistic budget could lead you to overextend yourself in a settlement agreement. Creating a realistic budget can help you in determining whether you need spousal support to help you move forward, or, on the other hand, whether you can afford to pay spousal support to your soon to be ex spouse. The budget can also help you with division of the assets and debts. With a budget, you can understand if you can afford to keep paying the mortgage on the family home, take over the vehicle loan on your car, or agree to take some of your spouse’s debt.
Another important mistake to avoid is not understanding how property and debt is likely to be divided in a divorce. A court will look to specific factors contained in New Jersey statute when making a division of marital assets and debt. New Jersey is an equitable distribution state, which means that the marital property will be equitably distributed. One mistake often made is that “equitable” will always mean equal, but that is not necessarily true. Failing to understand how property is distributed can result in accidentally taking on more debt or sacrificing more assets than necessary.
Failing to use a Qualified Domestic Relations Order (QDRO) to divide your pension plan or other retirement account. Cashing out those accounts to divide them can result in severe taxes and you can sacrifice significant value. Using a QDRO can allow you to divide the accounts without cashing them out immediately.
Contact us today and let us talk to you about your marital assets and your divorce. We have extensive experience helping our clients with these matters.
Are you interested in seeking an annulment? If so, contact Williams Law Group, LLC right away. Our family law attorneys will review your case to determine if an annulment is an option. If it is, we will guide you through the process and ensure you make the best decisions for your future. Call our office at (908) 738-8512, email us firstname.lastname@example.org, or contact us through our confidential online form to schedule a consultation Download our Free Resource Guide today!