Financial mistakes following property division may be detrimental
Posted in Property Division on November 1, 2018
Ending a marital union in California can no doubt be a stressful experience from an emotional point of view. However, the process can also put a strain on a person’s finances as he or she navigates tricky matters such as alimony and property division. Here are a couple of money mistakes that people often make, following property division, that may further put them in a financial bind.
A particularly common mistake that newly divorced people make is to go out and buy highly priced items — such as cars and houses — to make themselves feel better in the wake of the divorce. However, this so-called retail therapy may end up causing these individuals more harm than good. If they do not have plans in place to pay for these newly acquired assets with their incomes alone, they may end up losing them all.
People may also make the mistake of cashing in their investments after divorce to address various bills. Although they may plan to restore these funds later on, they simply may not be able to do so. In addition, they might end up paying large tax bills upon cashing out these investments. Taking money out of their investment vehicles may also put them further behind when it comes to reaching their financial objectives in life.
Getting divorced in California can understandably be a financially complicated ordeal. For this reason, consulting an attorney before making major financial decisions during a divorce proceeding may be a wise move. The attorney can provide guidance regarding the best way of approaching property division and handling spousal support to meet one’s unique needs long term.