6 Divorce Traps to Steer Clear Of

November 15th, 2016 Posted by  Dwayne and Caroline

6 Divorce Traps to Steer Clear Of by Dwayne Grady & Caroline Girgis

{3:06 minutes to read} Deciding to divorce is not easy. There are so many decisions that need to be made, most of which are difficult and emotionally charged. As if this is not enough, there are a number of traps just waiting to trip you up and make the situation even more stressful and difficult.

The following are 6 traps that you should try to avoid:

1. Consider all your options.

We’ve said it before, but we can’t stress this enough: Going to court is rarely the best option. Other than the cost to litigate, which could be tens of thousands of dollars in legal fees, there is the time involved—2-3 years or more.

Look for alternative ways to come to an agreement with your spouse. Mediation and collaboration are two alternatives that can not only bring down the overall cost but also create an environment where you can actually work together to find a compromise with your spouse.

The key is to have this discussion about alternative forms of divorce early in the process. Visit and interview both mediators and professionals in the collaborative field to make the best decision. 

2. Understand the tax impact. 

The old saying, “It’s not how much you make, its how much you keep” applies here. The impact of splitting a taxable stock portfolio vs a retirement account makes a difference. If you do not understand the impact, you could be making a mistake that will cost you dearly. 

3. Don’t wait to split retirement plans.

Do not wait until after the divorce to figure out how to split retirement plans. Qualified plans like a 401(k) require a special document called a Qualified Domestic Relations Order (QDRO) to split that asset. This should be drawn up, discussed, and put in the Marital Settlement Agreement.

4. Look closely at your desire to keep the house.

Separate the emotional attachment from the financial obligation. Can you afford the mortgage, taxes, and upkeep? If you have limited funds, is this the best use of those dollars?

5. Get your estate plan in order.

Wills, trusts, and beneficiary designations on insurance and retirement plans are often overlooked but need to be addressed.

6. Don’t rely on friends and family for advice.

It’s not about whether or not they have an agenda; it’s about whether or not they know all the facts. Their experience, assets, emotional state of mind and financial needs are not yours. If you want advice, get it from a professional.

anew-group

ANEW Divorce Planning
Dwayne Grady (CFP®, CLU®, ChFC®, CDFA™, MBA)
Caroline Girgis (JD, ChFC®, CDFA™)
1750 Tysons Boulevard Suite 1500, McLean, VA 22102
(703) 289–5041

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This entry was posted on Tuesday, November 15th, 2016 at 8:13 pm and is filed under Divorce.