During your divorce, it is important that you keep mistakes to a minimum. One misstep could be costly and result in losses for you. Here are some ways in which you can avoid making costly mistakes.
Factor in Inflation
One of the biggest mistakes divorced people make is forgetting that prices increase over the years. As a result, expenses that you and your former spouse worked out in the divorce settlement could be far more costly down the road. For instance, the price of child care can be as much as $18,773 a year in some cities. If you fail to consider a possible increase in child care, you could be stuck with paying the difference in care. Whether it is child care, school tuition, or other expenses you and your former spouse will continue to share after the divorce, be sure to factor in inflation.
Obtain Insurance for the Divorce Settlement
If you are owed future payments for child support, alimony, or other expenses, the death of your former spouse could leave you scrambling to make up the difference from the lost income. To ensure that your expenses are still covered in the event that your former spouse dies, you need to obtain insurance for the settlement. The insurance would help cover the loss of income from your former spouse, which is important if you have future expenses, such as college tuition, that rely on your former spouse's income.
Be Realistic About Your Expenses and Assets
You and your former spouse's assets and expenses are heavily factored into creating an alimony and child support settlement. If you are going to be the recipient, you need to be honest about your finances so that a fair settlement can be reached so you can meet your expenses in the future. If you are the payer, honesty is as equally important. By being honest, you can help to ensure that you are not ordered to pay more than you are able to afford.
Your family attorney can arrange for you to work with a financial planner to create a budget detailing your monthly expenses and income if you need help.
There are many more costly mistakes that could be potentially made in a divorce. Before making any legal decisions or discussing your situation with your former spouse and his or her attorney, you need to talk with your attorney. Your attorney can provide you with more information and invaluable advice on how to avoid other mistakes.
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