Critical mistakes during divorce can cost dearly

Divorce changes people's lives in more ways than many people imagine. In some cases divorce has a lasting negative impact because of choices people make during the divorce. Many people make choices during the divorce process that end up costing them a great deal of money down the line. People should be aware of some of the most common mistakes that people make when getting a divorce and how to avoid those mistakes.

Not considering alternative dispute resolution

One of the biggest errors people make when going through divorce is rushing to litigation, rather than trying some form of alternative dispute resolution such as mediation or collaborative law. ADR methods can end up costing people far less than traditional litigation, since they often resolve divorce cases more quickly than going through the court. People spend less in attorney fees and court costs. Many who use some form of ADR for divorce also report feeling more satisfied with the outcomes of their cases because they feel like they had a say in how matters such as child custody and property division were resolved, rather than a judge dictating the terms.

Improper financial planning

People need to have detailed financial plans when negotiating a divorce property settlement and issues like assets and child support. If they have an unclear idea of their current assets and expenses, they will not understand how much marital property they need or are entitled to. Additionally, failure to make a budget for post-divorce life can lead to people not asking for enough during property settlement negotiations or failing to secure high enough alimony.

Furthermore, many people often fail to engage in long-term financial planning, so they do not secure enough assets for retirement. In many cases, people fail to hire professionals who can evaluate defined benefit pension plans properly, so spouses are unaware of the true value of these assets and end up with less than they deserve in the property division.

Not updating important documents

After a divorce is final, people still can make costly errors. Often times, people forget to update estate planning documents such as wills, retirement account beneficiary designations, life insurance policy beneficiary designations and other assets. Even if people do update their wills, the changes that they make to their wills will not control the beneficiary designations on non-probate assets. People's ex-spouses could end up inheriting their estates, rather than the loved ones people really wanted to inherit without updating all of these documents.

The financial aspects of divorce can be complicated. A skilled divorce attorney can help clarify matters and ensure that a person's interests are protected during the process. If you have questions about divorce, seek out a skilled divorce attorney who can offer guidance about your specific situation and advise you about your options.