You’re jostling with your spouse over the custody of your child and the division of assets, running around for documents and getting updates from your divorce lawyer. Divorce is a period of upheaval, and in such a situation, being careless about money can be one costly mistake.
On the other hand, if you successfully avoid making them, it can help soothe the pain a lot better. Take control of financial matters immediately.
Here are 5 financial mistakes you can avoid during a divorce.
1. Overlooking collaborative divorce or mediation
If you and your partner amicably reach an agreement outside the court, you can avoid getting emotionally aggravated. The process includes a neutral family law attorney as a mediator. Mediators are not judges. They only help divorcing couples reach agreement on different issues. By choosing collaborative divorce, not only do you control your divorce, but save thousands in divorce lawyer fees.
2. Being uninformed about assets
If your partner has had greater hold on your joint marital assets, they have a better understanding of it even during the divorce. Be wary of your partner re-titling or liquidating these assets now. Immediately let the holder know and get the court to give you a restraining order. You can also get an application against dissipation of these assets, in the court. It is advised that you should always be aware of all your assets and cash in your joint accounts and savings. Also, be sure to track pending family debt and insurances.
3. Being overly attached to the family home
Do not get emotionally involved with the family home. Typically, the parent that has the custody of the children will want to live in this home so that there are fewer disturbances in their kids’ lives. You need to assess whether or not you fulfill the eligibility criteria for it.
If this property happens to be, say, an HDB flat, an outstanding mortgage on it requires you to get the loan refinanced. Single parents with custody of children get easy retention. Childless ones over the age of 35 can get it through the Single Singaporeans Scheme. However, the flat then has to be a resale one, bought without the CPF Housing Grant.
If you fall into none of these categories, you will have to move into a smaller home. HDB flats can be sold after your an MOP of 5 years.
4. Failing to update estate documents in time
For anyone considering taking a divorce, creating/updating their will is absolutely necessary. According to the law, if there is no will in your name, at least 50% of your assets will be transferred to your spouse in the event of your demise. You should ideally hire a lawyer to make a will for you, where you can mention as to who gets what from your assets after your death. Remember that at the time of marriage, wills made before are revoked.
5. Hiring divorce lawyers to punish your partner
The reason is that the courts will not award financial punishment to your spouse for being bad as a person. To top it, hiring a combative divorce lawyer to ensure punishment for your spouse will only add to the former’s fees, and make matters worse for you financially. Divorce should be treated as a business arrangement.