The Most Common Financial Mistakes Made During Divorce In California
If you’re considering or pursuing a divorce in California, there are some common financial pitfalls that you should try to avoid during the process. Most experienced family law attorneys have seen clients make these mistakes and pay the price. If you have questions about which steps you should take to help ensure your divorce is successful, a lawyer who’s devoted part of their practice to family law may be able to help.
What mistakes do couples make when they divorce in California?
Failing to understand your legal options prior to filing for divorce
This mistake is probably the easiest one to make– and it’s the costliest, too. When California couples don’t understand all of their legal rights and alternatives prior to filing for a divorce, it puts them at financial risk.
- It’s best not to take legal action by yourself
- Try to avoid “DIY” divorce solutions or “kits” that you can find online
You should speak to a trustworthy divorce lawyer with a proven track record before you make the choice to divorce. Your lawyer will also be able to help ensure you don’t make any other mistakes throughout the divorce process.
Failing to properly identify your separate property
California is one of nine states known as community property states. In community property states, any assets that are acquired during a marriage are considered “community property.” In short…
- Most of the assets you and your spouse acquired during your marriage are subject to distribution (they’ll be divided up between you)
- Most of the assets you acquired before your marriage are not subject to distribution
Those assets that you acquired pre-marriage are called separate assets. Separate assets are yours– and they’re yours to keep. If you don’t take the time to identify separate assets during your divorce, you might end up dividing things that were yours to begin with.
- There are exceptions when it comes to which assets fall into the community property category; a divorce lawyer can help with the specifics of your circumstances
Failing to adequately document everything
Just like a lot of divorcing couples don’t spend time identifying and separating property, many of them also don’t devote effort to good documentation. There’s a lot that happens in a divorce. There’s a lot that happens with money, too– even when two people aren’t trying to disentangle their finances.
All of that needs to be documented. If you’re not careful and thorough about this process, you could wind up with inaccurate results during your divorce. Sometimes those hurt more than you think.
In a worst-case scenario, you may even be accused of attempting to conceal or falsify financial information. It’s best to get ahead of the curve and document everything well from the beginning of the divorce process.
Making emotional decisions
You should avoid emotional decisions during a divorce as a general rule, but you should really try to stay rational when it comes to your money. It helps a lot to work with a trustworthy legal professional who can offer you guidance.
If you feel yourself starting to get too emotional during an important step of the divorce process, take the time to work through your emotions before you make a big decision. The choices you make during a divorce have the potential to impact you for a lifetime. Your legal team can help you make the best decision for your future.
Failing to budget ahead
Usually, a budget involves some sort of plan for how much a product or service will cost. There’s no way to guarantee how much money you might need to spend during your divorce, but you should try to do some budgeting beforehand anyway.
Remember that you’ll likely need to pay:
- Filing fee
- Attorneys’ fees
- Court costs
You may also need to work with experts like:
- Tax advisers
- Real estate appraisers
- Child custody evaluators
Trying to hide assets
For some people, it’s tempting to try to hide assets during a divorce. There can be a lot of reasons that somebody does this; sometimes it’s a problem between adults, but sometimes it can hurt entire families when there are children involved.
Best practice? Nobody should ever try to hide their assets during a divorce. Ever.
- It’s illegal to hide assets during a divorce
- You may be faced with penalties and lose credibility in court
Unrealistic lifestyle expectations
Sometimes, people going through divorces want to maintain the same lifestyle that they and/or their children had before the divorce. Sometimes this works out; but sometimes, it’s a little too much to ask for.
It’s understandable if you want to live the same life you did before– especially if you’ve got kids; but when you go from a dual-income household to a single-income household, that’s not always realistic. Having outlandish expectations for your divorce and finances can prolong proceedings.
Assuming a fight in court is inevitable
This goes along with understanding your options before you give it your all to pursue a divorce. If you do choose to divorce from your spouse, you shouldn’t assume that you’ll be forced to have a long and expensive fight in court.
Collaborative divorce and mediation help couples save money when traditional divorce proceedings aren’t necessary. If you’re willing to partner with your spouse for the greater good during the divorce process, it could serve you much better than you’d think.
Pedrick Law Group, APC: Family Law Attorneys In Orange County, California
Our Irvine office is ideally located for clients in Irvine and Orange County
A family law attorney can help somebody avoid many of the financial mistakes traditionally associated with divorce in California.
If you or somebody you love has questions about family law, the team at Pedrick Law Group, APC may be able to help. Reach out to us online today or call us at 949-388-8682 to speak to a legal professional about your potential case.