Divorce is something rarely touched on when it comes to financial planning. But, with costly ‘grey divorces’ in adults over 50 almost doubling since the 90’s, it is something that must be discussed. Here are just a few of the main mistakes that expats commonly make when going through a divorce.
- Taking the House
Coming away with the house may seem like hitting the divorce jackpot. Unfortunately, however, houses today quite often have negative equity, and it may be too expensive for one spouse to maintain. Consider all your options, and think about selling the house.
- Selling Assets for Cash Flow
A divorce can be as simple as filling out a form, or complex with long court cases – often with large price tags. To fund these payments, increasing your cash flow may seem like a smart option. This could be through selling shares, or any other assets. After this, you may look to simply put the money back in to where it came from. Unfortunately, this large capital gain could mean that you have to pay a substantial tax bill.
- Securing Spousal Support and Child Support with Insurance
You cannot guarantee that your spouse will be able to pay alimony and child support in the future. Things such as sickness, loss of job and relocation can cause potential turmoil later in life. Thankfully, you can request that your spouse obtain disability and/or life insurance policies that will ensure payments will continue in the event of your spouse’s disability or death.
- Making a Large Purchase
It is important to settle your finances before thinking of purchasing something major. You may want to jump right back onto the housing ladder, but this can often be a huge financial mistake. Consider renting whilst you work out how much you can safely spend.
- Not Consulting Someone About Their Finances
In a divorce, emotional upset often leads to irrational thinking. Consult with a professional that will help you navigate complex financial decisions. In addition to their legal knowledge, they can also offer a 3rd party perspective.
With all your assets on the line, mistakes can be devastating. It is therefore vital that both individuals take the right steps to ensure that the divorce does not unsettle your financial future.