As we finally put 2020 in the rearview mirror, many people are looking forward to the new year and completing or starting tasks that may have been put on hold. For some people, that means taking the necessary steps to pursue or complete a divorce. In preparing for divorce, clients often ask how to best protect themselves financially and what, specifically, they should not do if they know divorce is on the horizon. While each divorce case is different and hinges on a variety of factors, below are a few common financial mistakes to avoid during divorce proceedings:
For a variety of reasons, many clients immediately share with me that no matter what, they want to keep the marital residence. The reasons vary from keeping the kids in a stable place, not wanting the hassle of moving, having supportive neighbors, etc. However, this is one of the biggest financial mistakes made during a divorce. Often, keeping the marital home puts an unnecessary financial burden on the person that decides to stay. This is especially true once the parties separate and the combined income that once supported one household now needs to support two households. While someone may want to consider staying in the marital home, it is important to maintain flexibility and decide if selling such a large financial asset may be best for everyone involved.
In Pennsylvania, asset division is based on equitable distribution, not necessarily equal division. Clients often have unrealistic expectations about how their assets will be divided and, therefore, are not prepared both emotionally and financially for what will happen when the parties’ marital estate is ultimately divided. Depending on the circumstances of each case, the assets may be divided equally or they may be divided with one party receiving a greater share. In order to determine the specific division, the court reviews a number of factors that are set forth in the divorce code. It is important to recognize that just because one party might be the “owner” of an account or a business, it does not mean that person will receive all or even a greater share of that asset.
Divorce brings with it many complicated emotions. Often these emotions result in clients wanting to pursue issues that do not make financial sense. For example, divorce clients often want to fight over issues that might be insignificant financially, but that, for whatever reason, feel important to prove a point to the other party. Attorney fees can accumulate quickly and clients need to think about whether certain smaller issues are worth the fees it will cost to achieve the desired result.
In order to make sure you are in the best position to approach a divorce, an attorney can advise you as to how to best financially prepare for what lies ahead. Educating yourself about the common mistakes mentioned above, among others, will set you on the right path to be best prepared in the event of divorce.
The information contained in this publication should not be construed as legal advice, is not a substitute for legal counsel, and should not be relied on as such. For legal advice or answers to specific questions, please contact one of our attorneys.
Doylestown Divorce Attorney Hillary co-chairs Obermayer’s Family Law Group. She focuses her practice exclusively in the area of family law, where she handles all phases of the negotiation and litigation of domestic...
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