“I just want to get this over with.” How many men have uttered that phrase in the midst of a divorce? This is a common sentiment and often causes men to create more difficulties for themselves in the future. Or, look at the other utterance we hear, “I am going to make her life miserable in this divorce.” Driving up the costs of litigation or stopping support money are just as bad as giving her everything she wants.
We have put together some of the most common financial mistakes men make during a divorce so you will not make them! If you are headed down that path, read these carefully and make sure you protect yourself by not making these mistakes during your divorce.
Excessive Litigation Costs – being angry with your spouse is one thing, but purposely driving up the costs of litigation is another. Firstly, why waste the money? Just trying to make things difficult for her “because you can” is spiteful and foolish. Secondly, some courts have laws against this and the judge can actually fine you for this type of behavior.
Not Paying Child Support – it may seem like a good idea to cut child support to put the financial “screws” to your ex, but this will only come back to haunt you, and sooner rather than later. Any unpaid support goes into arrears and not only will you eventually have to pay it, but you may also find yourself in jail. If, for some reason, you are unable to pay, such as job loss, contact your attorney immediately and make him or her aware of the situation so he or she can handle it properly and legally.
Running Up Debt – this is another mistake that falls into the “stick it to her” category. You figure since all assets and debt are equally distributed, she will end up having to pay half of whatever you spend, right? Wrong! Equitable distribution means assets and debts are distributed equitably, not equally (although assets will generally be split 50/50). So, if you were making more money, you will end up walking away with more of the debt. The court will also look at when the debt was accumulated, especially if there was a spending spree on some joint cards prior to the divorce.
Commingling Assets – imagine you get an inheritance that was left specifically to you by your rich uncle. You took that money and added to the joint bank account. The moment you do that, it is part of the marital estate, not just your money. If you have something that is yours and you want to keep it that way, make sure the item is never commingled with marital assets in any way.
Over-Extending Yourself Financially – this is quite common for the men that feel bad about the divorce and will give into their ex on everything simply to get the divorce over with. You move out, continue to pay the mortgage, pay the bills, offer child support over and above what the court offers, and the next thing you know, your credit cards are maxed out and you cannot even pay your own rent. Take the time to look at household bills and figure out a new budget to see what you can legitimately afford before committing to a firm number.
Avoiding the Children because You Want to Avoid the Ex – the children should not lose their father because your wife is losing a husband. Easier said than done, though, right? You are upset, and have good reason to be. You want to avoid seeing your ex at all costs, and every time you see the kids, there she is. You are going to have to get over this and figure out a way to communicate and exist with her reasonably so you can remain active in your children’s lives. There are hosts of problems that can develop if you simply avoid them because of her. You are not only hurting yourself concerning child custody when the divorce goes before a judge, but this can also lead to developmental, anger, and resentment issues for the children.
Mortgage Assumptions – you decide to let your wife have the home in the divorce so the kids do not have to be uprooted. However, you never have your name removed from the mortgage. What do you think is going to happen if she ends up defaulting on the mortgage? Correct, the mortgage company is going to come after your assets too! If she gets the house, make sure the mortgage is refinanced and your name is completely removed from all financial commitments concerning the home.
Giving Addition Financing – this ties into the over-extending point we made above. Nobody wants to be the bad guy, so when she says things are tight and needs a little extra cash, you give it to her. She needs money for clothing or for school supplies, so you reach into your wallet and hand her some money. Great gesture, but you are giving her cash that you will never get credit for in terms of child support. If she needs money early, make sure it is documented in the form of a check so you can offer it as an “advance” on your normal support payments. If your check is being garnished for child support, this is something you should discuss with your attorney to make sure you are in fact getting credit for any moneys being paid between regularly scheduled support payments.
Not Paying Alimony – simply put, this is just a mistake. Yes, writing out that alimony check every month hurts, but there is nothing you can do about. But, it is tax deductible, so at least you can write off the payments. However, if alimony is in the divorce settlement, go over the agreement with a fine-toothed comb to make sure the agreed upon amount cannot later be modified to increase. If not, she will be getting a share of any raise you receive post divorce. Lock the amount in for your current salary and make sure there is a clause where it can be lowered if you were to lose your job, are forced to take a salary cut, or change positions with a lower salary.
Leaving the Home Assets Behind – you just want to get out of the house so you leave everything behind. That’s fine, but make sure you take an inventory of the household assets before you leave. Everything in that home is considered a marital asset and should be accounted for during the property division. If not, you not only walk about from the home starting from scratch, but you will not even have been reimbursed for your share of the items currently in the home.
Making Bad Trades – right now, the Redskins look pretty bad for having given the Rams the world for Robert Griffin III, and you will look just as foolish if you trade bank accounts for retirement accounts. It is not uncommon to be cash-strapped walking away from the divorce, so it is perfectly understandable why you may agree to take the $20,000 bank account over the $20,000 IRA, but this is not a fair trade. If your lawyer does not already work with a CPA or financial planner, consult one about the actual worth of these accounts before “trading” them off. You want to ensure you are getting fair cash value for any assets, such as a 401(k) or pension, before you finalize your agreement.
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