As Los Angeles divorce attorneys, we have seen and heard it all. We’ve seen good divorces, and we’ve seen bad divorces. That said, we feel the special need to help people avoid making some of the most common divorce mistakes.
Perhaps right now, you’re on track to retire at 55 or 60, but if you divorce, you’re going to have to work another 20 years. Is it worth it?
For many people in your situation, the answer is a clear YES if it means they will be much happier and will no longer have to deal with the stress of being stuck in an unhappy marriage.
If your marriage is on its last thread, you don’t want to be financially devastated if your union does end in divorce. If you do end up going down that path, here are some things to consider in advance:
1. What should be done with the primary residence?
This is often a point of contention in a divorce. Usually, the smart thing to do is sell the house, and for each spouse to buy a smaller home. However, one spouse is often determined to keep the house and the spouses try and make it work for the sake of the kids, but this isn’t always the best financial decision.
Let’s say that Mary keeps the home in the divorce. Her husband Tom gives her 3 years to refinance the house, but she doesn’t do it. She realizes that even with child and spousal support, she can’t afford the house.
She is laid off at work, and she misses the mortgage payments. Tom’s credit takes a hit. Not only is he responsible for the payments, but now he can’t qualify for a refi on his small condo.
At the time of the divorce, Tom was more concerned about not disrupting his children’s lives than doing the right thing with the house. He should have fought harder to sell the house, because in the long-term, it would have been better for Tom and Mary.
2. Benefits of mediation or collaboration.
Often, bitter spouses engage in a full-blown divorce war. If one of you wants to mediate or have a collaborative divorce, the other spouse should find a way to agree. While all spouses are entitled to their opinions, deciding to litigate can be costly!
Spouses need to remember that the goal is to preserve the marital estate as much as possible, and when you litigate, it drains the marital assets. If at all possible, strive to resolve your differences through divorce mediation or a collaborative divorce. Either method is far easier and less expensive than divorce litigation.
3. What does life after divorce look like?
Too often, people don’t know what life after divorce is like financially, and they end up struggling. During the divorce process, sit down and create a comprehensive post-divorce budget. Can you afford your home? Do you need to downsize or find a better job?
Create a post-divorce budget and let that guide your financial decisions. Do you need to increase your income or cut expenses? It can be a tough process, but it’s worth it.
Divorce can be financially draining, but it doesn’t have to be. By preparing in advance, you are putting yourself in the best position to make sound decisions, which will help you succeed in the next chapter of your life.
Contact Claery & Hammond, LLPto speak with an experienced member of our legal team.