Divorce can lead to financial and property division mistakes

The prospect of freedom from a bad marriage can lead the former spouses to make impulsive decisions that can result in long-lasting financial problems. Clear thinking during property division and afterward can avoid common mistakes. Florida residents facing a dissolution may benefit from the assistance of experienced professionals.

In many situations, spouses may fight over the ownership of a home. If the property has been owned for some time and has accumulated value, it may make financial sense for one spouse to retain ownership. However, if the home has negative equity or will be a financial hardship to maintain, it may be a fiscally sound decision to sell it. Likewise, if an IRA account will be divided in a divorce, choosing to roll over the portion into a separate IRA account can avoid costly tax consequences and penalties.

Furthermore, not tapping into cash reserves set aside for future plans will avoid the tax complications that can be a result of cashing out retirement savings. Some may be tempted to engage in shopping therapy in an effort to boost their emotions. However, the costs of these purchases can result in financial setbacks since the payments may be outside the scope of a tighter budget. There are also some who may quit a job in an effort to avoid alimony payments, which will have a negative impact on financial well-being.

There are looming changes to the tax laws that may negatively impact finances, but careful planning can help offset some of these problems. Lastly, financial professionals urge those going through a divorce to draft financial plans that can help ensure goals will be met in the future. Florida residents who are going through a divorce are encouraged to make careful decisions during the property division in order to preserve a stable financial future. An experienced attorney can provide assistance in drafting a suitable settlement agreement.

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