Avoid These 4 Mistakes When Seeking Financial Support in Divorce

• Mistake 1: Rushing through the divorce process
• Mistake 2: Failing to represent your financial picture accurately
• Mistake 3: Failing to try mediation
• Mistake 4: Being too short-sighted
• Hello Divorce has the services you need

Are you getting divorced? Do you plan to ask your spouse for alimony? Or perhaps child support? If so, you’ve got a lot on your plate. Learning all you can about the divorce process can help.

Determinations about alimony and child support are based on various factors. For alimony, these include age, length of marriage, your ability to support yourself, and available resources. For child support, the number of children involved and state-specific formulas play a significant role.

Stay with us as we dive deeper into this topic, arming you with the knowledge you need to avoid big mistakes and navigate toward a financially secure future post-divorce.

Mistake #1: You rush through the divorce process

In the throes of a divorce, it's understandable to want to hasten the process. The emotional toll can be heavy, and a quick resolution seems like the best path toward healing. However, rushing could cost you financially.

One of the most common mistakes made in the pursuit of alimony or child support is glossing over the details. An overlooked bank account, an underestimated value of a property, or a hastily signed agreement could significantly impact your divorce settlement. It's not just about what you know but what you might not know that could hurt you.

What do we mean by this? Every detail matters in divorce proceedings. For instance, if you neglect to account for all income sources – salary, bonuses, dividends, rental income – it could result in a lower alimony or child support payment. 

Similarly, underestimating the value of assets such as properties, investments, or even valuable collectibles could lead to an unfair division of assets.

Mistake #2: You fail to represent your financial picture accurately

In the realm of divorce proceedings, accuracy is your best ally. Providing an accurate representation of your financial situation is paramount when seeking financial support. 

If you understate your needs or overstate your income and assets, you could end up with less than you require to maintain a reasonable standard of living post-divorce.

So, how do you paint an accurate financial picture? Here are a few pointers:

• Keep track of your expenses. Start with a comprehensive list of your monthly expenses, from groceries to utility bills, mortgage payments, and any other recurring costs. Don't forget to include medical expenses, educational fees, and any unexpected costs that might arise.
• Detail your income. Include all sources of income. This could be from employment, investments, rental properties, or any other source. It's not just about how much you earn; it's also about how you earn it.
• Document your assets. Make an exhaustive list of all your assets. This includes bank accounts, real estate, vehicles, investments, retirement funds, and even valuable personal items like jewelry or artwork.
• Don't forget debts. Outstanding debts can significantly impact your financial situation. Be sure to include student loans, credit card debt, mortgage balances, and any other liabilities.

For an even more comprehensive analysis, consider hiring a certified divorce financial analyst (CDFA). A CDFA specializes in the financial aspects of divorce. They can provide a detailed assessment of your current situation, help you understand the long-term implications of proposed settlements, and guide you toward a financially secure future.

Read: What Is a Certified Divorce Financial Analyst (CDFA)? by Erin Levine, Hello Divorce Founder, CEO & Certified Family Law Specialist

Mistake #3: Failing to try mediation

Mediation is a method of dispute resolution where a neutral third party, the mediator, helps you and your spouse negotiate a divorce settlement. It's less adversarial and often more cost-effective than litigation. And, it can lead to more satisfying outcomes for both parties. 

So, why do some people skip this step?

There's a misconception that mediation is only for amicable divorces. That's not the case. Even in contentious divorces, a skilled mediator can facilitate communication, help identify common ground, and guide both parties toward a mutually acceptable agreement.

Some people fear they'll be shortchanged in mediation. The mediator doesn't make decisions; they facilitate discussion. You still have control over the final agreement. You can (and should) have your lawyer review any proposed settlement before you agree.

There's also the belief that mediation won't work. While it's true that not all mediations result in an agreement, many do. And even when they don't, the process can provide valuable insights into your spouse's position, which can be helpful if you end up in court.

If you're seeking financial support after divorce, consider mediation. You might find it's a more peaceful, cost-effective, and satisfying route to securing the support you need. It's not about winning or losing; it's about finding a solution that works for everyone involved.

Read: What to Expect in Mediation by Heather MacKenzie, Hello Divorce Co-Founder and President

Mistake #4: Being too short-sighted

A common mistake made in divorce settlements is focusing solely on immediate financial needs such as housing, monthly bills, and childcare costs. While these are undoubtedly important, they don't paint the full picture of your financial future. What about retirement savings? Long-term health care? College tuition for your children?

It may seem daunting to think about these long-term expenses during such an emotionally charged time. But it's vital to factor them into your financial support negotiations. Consider this: If your settlement covers only your current expenses, you may struggle financially down the line.

To avoid this short-sighted mistake, take a step back. Map out your long-term financial goals. Think about where you want to be in five, ten, or even twenty years. Will you have enough for retirement? Do you plan to help your children with college tuition? Are there major expenses on the horizon like buying a new home or starting a business?

Once you've outlined your long-term goals, bring them to the negotiation table. Your future needs are just as valid as your current ones. If you're unsure about how to calculate these future expenses, consider working with a financial advisor or certified divorce financial analyst (CDFA). They can provide expert advice and help you craft a comprehensive financial plan. 

Hello Divorce offers the services you need

At Hello Divorce, we have the expert help you need, including CDFAs, mediators, real estate specialists, and lawyers. Our team is committed to helping clients make it through divorce successfully and economically. 

To learn more about us, we invite you to schedule a friendly 15-minute free call with an account coordinator. We can’t wait to meet you.