This is the second in a two-part series on financial mistakes people make while going through a divorce. In the first part, I discussed the mistakes women make. Today, I talk about financial mistakes men make during divorce.
As I have mentioned in previous blogs, I recently spoke with Over Divorce, a podcast and website specifically geared toward men who are struggling with divorce. Getting divorced isn’t easy for anybody, and my job is to help you navigate the process and come out with the best possible outcome for you.
I’d like to discuss some of the financial mistakes that men make when getting divorced. These include:
Giving her everything in the house
Men sometimes don’t pay that much attention to the contents of their homes and offer to let the wife have everything. They figure they will just start over with all new household goods.
The cost of those household goods quickly adds up. You could be walking away from tens of thousands of dollars. You may want to take the extra step of having everything in the home appraised. I bet you’ll be surprised how much your items are worth.
And don’t underestimate how much replacing all those goods will cost you in a new home.
Assuming you will each be responsible for your own debt
Just as assets are divided in a divorce, so are debts. How debt is divided varies by state law. In some states, the amount of debt and assets brought into the marriage may be taken into consideration.
While there may be no fixed formula for dividing debt, some factors a judge in Georgia may look at include the standard of living of the couple, who earns the most money, the health and age of each spouse, and the length of the marriage.
Of course, the best scenario is to have no debt at all to worry about.
Comingling an inheritance in a joint account
Some people assume an inheritance, financial gifts, or disbursements of a trust they received will remain theirs should a couple of divorces. Well, that depends. If you received such payment and put it into a separate bank account and kept it separate, then yes, you can claim that money as yours.
It’s getting trickier, however, if you deposited a check into a joint account. Then those funds may well be considered a gift to the marital unit. Or you may have started with a separate account, but then you and your wife both made deposits to it. At that point, it gets complicated.
If you are considering divorce and receive these types of funds, deposit them in a separate account which your spouse does not have access to and keep them separate.
Trying to hide assets
So you’re planning to divorce your wife, but don’t think she deserves half of your assets. Or she is cheating on you. And you have to pay her to get out of the marriage? Or maybe you think if you don’t disclose your real income, you can pay less in alimony and child support.
There are lots of reasons men decide to hide their assets. Here’s my advice about that. Don’t do it.
If you are found out, and chances are you will be, the judge can impose stiff sanctions on you. He or she may even penalize you for that behavior. And these days, with technology, it’s easier to catch spouses hiding assets than ever before.
These lists of mistakes by men and women are by no means exhaustive. The truth is that navigating a divorce can be tricky and it’s best done by hiring a professional to represent you early in the process. Mistakes like these, and others, can cost you plenty during a divorce.