When you married your spouse, you probably did not do so with the intent of one day ending your marriage. Yet, divorce is sometimes the best, and only, option. When you’re going through a divorce in Texas, you will have to make big decisions while dealing with stress and a whole host of difficult emotions. Consequently, what you do and the decisions you make during the divorce process can have a massive effect on your life and your future.
The experience of divorce will impact your life in nearly every way, especially economically. Dissolving your marriage will be a major financial event, so it is important to take the necessary precautions and avoid possible mistakes. Here are some common mistakes to avoid when it comes time to divide property and assets in a divorce.
Not understanding investment value and tax implications
If you were married for many years, you may have marital assets such as stocks, bonds or other investments. It is important that you gain an understanding of the value of these types of assets as well as the tax implications of owning them. For example, if you own stocks or mutual funds and decide to sell them for extra money, you will have to pay capital gains taxes and possibly other penalties if these assets were in retirement accounts.
Keeping the marital home
Keeping the marital home is a common financial mistake many people make in a divorce. Your home may hold sentimental value as well as monetary value, so it may be tempting to try to keep the home. However, take time to examine your situation and determine if keeping the home is financially feasible for you. You may be going from two incomes to one, so you may not be able to afford the mortgage, taxes or upkeep on the home.
Health insurance
During your marriage, your spouse’s health insurance and benefits through their employer may have covered you. After you divorce, you will no longer have this coverage, so make sure you have access to health insurance. If your employer offers benefits, consider enrolling in their plans. However, if you can’t get coverage through an employer, you’ll need to find alternatives such as your state’s healthcare exchange.
Obtaining legal help
There’s no question about it, divorce will change your life. In a short amount of time, your relationship status, living arrangements and parenting situation will all undergo changes and huge transitions. Trying to make sound financial and life-altering decisions under the stress and weight of your emotions can be challenging at best. Fortunately, you have the right to speak with a legal professional before making any major decisions. An experienced divorce attorney can help you create a plan to safeguard your personal interests and financial well-being.