When going through the divorce, you are juggling a million different things all at once. From dealing with the emotions to working on lifestyle changes, all the way to the subject of property division and child custody, divorce can be very taxing.
Unfortunately, one of the aspects of life that is often overlooked during the divorce process is finances. It is easy to understand why most people overlook their changing financial reality. After all, divorce is expensive, and it can be overwhelming to try to come up with a financial plan when everything seems to be upside down.
Here are common financial mistakes that you need to avoid while going through a divorce.
Assuming that equitable distribution equals fair division of the marital property
While Indiana is an equitable distribution state, it is important to understand that this does not always translate into a fair division of marital property. How so? Because an asset’s value is never defined by, or limited to, their current market value. For instance, an income-generating asset like bonds or rental property may be worth much more than their current value. It is important that you compare apples to apples during the asset division process, all the while paying attention to present values, transaction costs and tax implications.
Hiding marital assets
It is not unusual for one or both parties to try to hide marital assets. You can try to deceive the court and your spouse during the divorce process. However, you need to understand that hiding assets is illegal, and messing with the law can greatly impact your credibility before the judge, attract severe penalties and give the other party an advantage. It is in your best interest that you are forthright about your marital assets from the outset.
Divorce can be one of the most stressful processes to go through. From dividing marital properties to discussing custody, it is not unusual to make costly mistakes that can impact the outcome of your divorce.