Many individuals realize the prudence of divorce planning in New York. Timing a divorce for when it makes the most financial sense can help avoid unnecessary problems as well as establish the divorcing spouses on better financial footing. However, couples continue to make mistakes associated with divorce planning in New York, including:
Underestimating Expenses
Many people drastically underestimate their living expenses. While they may know the firm numbers, such as rent or mortgage, they may not realize how much they really spend on food, entertainment, clothing and other budget items. It is critical to start off knowing where you stand now in order to make decisions about your future. Spouses should carefully review bank statements and credit card statements to get a better idea about their current spending habits and to develop an accurate budget.
Failing to Make a Post-Divorce Financial Plan
A similar mistake is failing to consider post-divorce expenses. While living costs may be less because each spouse may move into a smaller unit, the income will also be divided. Additionally, if retirement funds are divided in the divorce, each spouse may have significant funds to make up.
Not Considering Mediation
Mediation often best serves the parties’ needs while helping them to minimize legal expenses. If the spouses are able to reach a fair settlement during mediation, litigation costs can be avoided and attorney fees can be limited. Mediation involves a third-party neutral who assists the parties in reaching solutions to their case. Because he or she does not represent either party, information provided during this process is objective in nature, allowing the parties to carefully consider it as they work on the terms of their own divorce.
