5 Common Mistakes To Avoid When Divorcing
Concealing or overlooking an asset:
In Massachusetts, all property, no matter how or when acquired, is considered marital property. How it is divided is another subject entirely. That said, even if it is something you do not want or feel you are not entitled to, it is important to disclose and ascertain the value of every asset so that it can be considered in your eventual division of property. Assets include items in safety deposit boxes, brokerage accounts, retirement accounts, bank accounts, trusts interests, whole life insurance policies, family businesses, real estate, equipment, etc. In contrast, concealing or hiding an asset in an attempt to shield it from your spouse is absolutely forbidden. Never attempt to conceal an asset as it will be likely be discovered. Once discovered, it will be used to undermine your credibility in court and will likely result in an unfavorable decision in some aspect of your case. When making an inventory of your assets, be sure to also thoroughly review and disclose your debt. In general, liabilities will also be considered marital debt and subject to allocation between you and your spouse.
Agreeing to anything just to get it over with:
Divorce proceedings can be long and protracted, sometimes taking one or two years and numerous court appearances before resolution. It is common to want to throw in the towel and accept any agreement just to get the process over with. This will be a great disservice to yourself and could have a devastating effect on your financial future. It is important that you stand up for yourself and receive what is equitable in your divorce. The divorce process will certainly run its course eventually, and you need to be in the best position possible to take control of your life post-divorce.
Failing to consider tax consequences:
It is important to consider the various tax consequences in the context of divorce in order to enter into the most beneficial support arrangement for divorcing spouses and determine how to prudently divide assets. There are also important tax-related considerations that parties and counsel should keep in mind when structuring a support arrangement. Child support is not taxable income to the recipient parent and it is not deductible for the payor spouse. Years ago, alimony was included as taxable income to the recipient spouse and was tax-deductible for the payor spouse with regard to Federal Income Tax Returns. This is no longer true. That said, it still holds true with regard to Massachusetts Income Tax Returns. In addition, parties and counsel should prospectively consider how/if dependency exemptions, real estate tax, and mortgage interest exemptions will be shared. In dividing assets at the time of divorce, parties and counsel should bear in mind the difference between liquid assets such as bank accounts, mutual funds, etc. and pre-tax assets including IRAs, 401(k)s and other retirement accounts (excluding Roth IRAs), as withdrawals on each account may have different tax implications.
Making decisions based on emotion:
It goes without saying that divorce is a highly emotional time for the parties involved. Making a decision based on guilt, vengeance, anger or any other emotion is a huge mistake. Although difficult to do, you must try to separate yourself from the emotion and treat your divorce in a businesslike manner. This is likely one of the biggest transactions you will ever be involved in. Remember that you need to have a long-term plan after the divorce, and making emotional short-sighted decisions will be regretted later. Being angry or vengeful will likely end up costing you and your soon-to-be former spouse a lot of money in unnecessary attorney’s fees and a lot of wasted time. Stop focusing on the past and prepare for your future.
Filing pro se or retaining the wrong lawyer:
Divorce is complicated and you should not try to do it all by yourself. Retaining a lawyer is an important decision. Hiring the right lawyer can prove to be difficult as well. Often time people will hire the most economic option or the attorney most convenient to their home or work. Obviously, this is not the proper way to make such an important decision. Do your homework! You need all the help you can get in a divorce. Research attorneys, interview several attorneys before hiring one, ask friends who have used attorneys for referrals, etc. Choose a lawyer that makes you feel comfortable and who has an excellent reputation. You do not want to have to change lawyers halfway through a divorce.