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We always later regret making important decisions when we were under an emotional cloud. This happens often in the divorce context. According to financial advisors, you should follow certain principles in order to prevent your decisions from becoming mistakes. In Michigan and elsewhere, it’s best to follow these suggestions when participating in property division and other issues.
Avoid embarrassment and weakness by documenting your financial situation, and having all of the information fully organized for divorce counsel at your first meeting. This includes making copies of tax returns for the past five years (three at the very least), investment records and title or documentation of all of your separate and marital property. Provide counsel with a list of values for all of your assets, and tally up all of your bills and liabilities.
The starting point is to provide thorough, accurate information regarding both separate and marital property. Don’t minimize or exaggerate financial details, but instead let the documentation speak for itself. Consider that some assets are not equal, and that sometimes an exact 50-50 split will work to your disadvantage.
For example, assets with similar dollar values can have different actual values when liquidated or computed into the future. If you have a choice between a home and a 401k plan, you’ll want to first consider after-tax values, and the long-term benefits from each. Additionally, one of the biggest problems is letting the emotions start making the decisions, which can turn out to be disastrous.
It’s important to control destructive emotions. Basing property division decisions on an uncontrollable need for revenge, for example, generally opens the danger to serious financial mistakes. Furthermore, you should be realistic about your short-term and long-term financial goals and planning. In the short run, you may have to make adjustment to your budget and lifestyle for purposes of having a more secure long-term outcome.
In Michigan and other jurisdictions, when there’s a property division you should take a look at all legal, insurance and financial documents to see what needs to be updated. You’ll also want to take your name off of any accounts that will continue in your spouse’s name. You can be held responsible for any debts incurred by a spouse on accounts that retain your name.
Source: yourhoustonnews.com, “Financial concerns during a divorce,” Byron Ellis, May 11, 2013