On behalf of Ronald H. Kauffman, P.A. posted in Divorce on Monday, April 28, 2014.
Perhaps my favorite newspaper is the Wall Street Journal. Last week the WSJ ran a discussion about the biggest financial mistakes in divorcefrom expert financial consultants I wanted to share. Here’s what they had to say:
Ted Jenkin is a co-CEO and founder of oXYGen Financial, a financial advisory firm. Ed finds the number 1 mistake among divorcing couples is their lack of consideration around liquidity of assets.
It’s pretty common after a separation that one spouse will end up with the primary residence. While the math may show a true 50/50 split, the reality is that one of the spouses will be stuck with a paper asset that could be tough to dispose of.
For Charles Rotblu, vice president with the American Association of Individual Investors, the biggest financial mistake divorcing couples make is not settling quickly.
My first job in finance was with a firm specializing in the valuation of closely held businesses. We were hired to give an expert assessment of what a business was worth. A few cases dragged on because one or both spouses were more concerned with inflicting financial pain than moving on. All this served to do was to drive up the legal costs of the divorce.
Eleanor Blayney is consumer advocate of the Certified Financial Planner Board of Standards. She worries that when strong emotions are put in the same cauldron as financial decisions, you have a recipe for disaster.
When spouses see money as the way to exact emotional revenge, the costs of divorce can be devastating. Find ways to separate the fury from the finances can protect both partners’ financial futures.
For George Papadopoulos, a wealth manager:
Getting a qualified divorce attorney to be on your side and look out for your own best interests is a must.
Michelle Perry Higgins is a financial planner and principal at California Financial Advisors.
You want to avoid making decisions on the basis of sentiments like “He can have everything, I just want this over” or “She can have the house, since the divorce was my fault.” To avoid this outcome, don’t rush through the divorce proceedings, organize your financial, estate and personal affairs and put all the information in one location, and then meet with your financial planner and divorce attorney to discuss your options.
I’ve blogged sound advice from other experts before. This advice is sound: (1) don’t fall into the liquidity trap, (2) proceed quickly to avoid running up legal fees, (3) Don’t let emotions cloud your judgment and (4) Get an expert divorce attorney.