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Financial mistakes to avoid during a divorce

States in the Northeastern United States, including New Jersey, have some of the lowest divorce rates in the country, according to the U.S. Census Bureau. That statistic can be partly attributed to the fact that people tend to marry later in life in New Jersey when compared to other states. 

high-net-worth divorce can become extremely complicated. The important thing for both spouses to remember is to keep their financial assets in order. No one wants to spend too much money on a divorce, but there are plenty of ways to hemorrhage money during this time. Avoid detrimental mistakes that can sink finances, such as:

Hiding assets

There have been instances of spouses hiding assets and money to make it seem like they should be due more alimony. However, the other party usually goes to great lengths to find any possible assets. It is illegal to hide assets, so it is best to lay everything out on the table rather than open yourself to risk. 

Preparing an inadequate budget

Create realistic monthly budgets while a divorce is in progress. As a general rule of thumb, it is a good idea to overestimate expenses rather than underestimate them. When preparing this budget, people should take into account the price of inflation. 

Not looking at tax implications

When dividing assets in a divorce, both people should consider the tax implications of each item rather than simply the market value. A person may want the family house, but this asset comes with heavy property taxes each year. Spouses need to think about whether they can truly afford something before fighting for it. 

Failing to look at social security benefits

Married couples who stay together for at least 10 years qualify for Social Security benefits. It may be more financially prudent to hold off on a divorce until this time. However, if a person absolutely needs to get out of a marriage, then he or she should take immediate action to get out of a bad situation rather than stick around for money. 

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