Making decisions about property and asset division is one of the more challenging parts of the divorce process. Not only can it be emotional and stressful, but mistakes are also commonly made.
People should not rush through the process, and they should take the time to learn about the future implications of potential decisions may be.
Not understanding the tax implications
According to CNBC, not all assets are worth what they seem. Assets that currently have the same value may have significantly different values when one considers tax implications. Each party should figure out the true value of an asset, after subtracting tax penalties, and use that to determine an equitable division. Retirement accounts can be tricky, as can stocks. It is worth hiring a financial professional to help determine the value of assets.
Putting the decisions in other peoples’ hands
Although it is often a good idea to hire others to assist with the division decisions, they should not take full control. Another mistake that some people make is that they do not understand what the financial implications are. Each party should make sure the accountant or financial advisor explains everything, so each spouse can make an informed decision.
Going through an expensive court battle
Not all divorce proceedings have to occur in court. In litigation, the lawyers often take over, and the division decisions may not be fair or what each side actually wants. The U.S. Department of Health and Human Services discusses how mediation is a less adversarial process.
During mediation, neutral third parties work with both sides to come up with a fair and equitable agreement. Each side has more control, and there is better communication between the parties. The mediator is also adept at conflict resolution and problem-solving, so when there are disagreements, the two sides are able to work through them. Mediation is quicker and cheaper than a court battle.