3 Common Financial Mistakes to Avoid Making in Your Wisconsin Divorce

 Posted on October 12, 2020 in Family Law

Each year there are millions of people who go through the long and tedious process of divorce. According to the American Psychological Association (APA), around 40 to 50 percent of marriages in the United States end in divorce. Both men and women experience divorce at similar rates, but they do not always experience divorce in the same ways, as women typically tend to suffer the most financially and experience greater financial losses after a divorce. According to a study conducted by the U.S. Government Accountability Office (GAO), women’s total household income fell by 41 percent after divorce, compared to men, whose total household income fell by only 23 percent.

Understanding Your Finances

One of the biggest reasons for the disparity in divorce outcomes is simply just a lack of involvement in or knowledge of the family’s finances. However, there are many reasons a divorce could go wrong, as well as many ways that you could make a mistake. If you are going through a divorce, you should avoid making these top financial errors:

1. Not Being Prepared: It has been said before that the key to success is preparation and divorce is no exception. Going into a divorce unprepared is not going to help you much, which is why it is your responsibility to make sure you are as informed as possible. If you are able to, try to obtain copies of all of your financial records and statements. Open up new bank accounts in your name only and start trying to separate your finances as much as you can.

2. Allowing Your Emotions to Make Financial Decisions: Divorce is an emotional process, so it is not crazy to think that you might be emotional even during some of the financial aspects of the divorce. One of the notoriously famous issues that place emotion and reason at odds with one another is the matter of the family home. For many people, especially those with children, the family home can be a greatly sentimental asset, even though keeping the home may not always be in their best financial interest. Avoid letting your emotions cloud your judgment and make your financial decisions based on what is best for your family.

3. Tapping Into Retirement Savings to Pay for Divorce Costs: It is no secret that getting a divorce is expensive. In some cases, savings can deplete, causing people to look for funds elsewhere. Even though it might seem tempting, you should not touch your retirement savings to cover costs during your divorce. Doing so would incur both withdrawal penalties and having to pay income tax on the amount. 

Contact a Menomonee Falls Divorce Attorney

Protecting your finances should always be at the top of your list of concerns, especially during a divorce. If you are currently going through the divorce process or you are looking for more information to determine if a divorce is right for you, our Waukesha County divorce lawyers can help. At Bucher, Wolff & Sonderhouse, LLP, we will provide you with legal counsel every step of the way to ensure your best interests are being considered. To schedule a free consultation, call our office today at 262-232-6699.

Sources:

https://www.wife.org/12-financial-pitfalls-of-divorce.htm

https://www.apa.org/topics/divorce/

https://www.aging.senate.gov/imo/media/doc/hr250gao.pdf