Where there are future income and tax consequences for financial decisions in divorce, the experience and advice of legal counsel can help couples prevent loss and waste of money and opportunity. In this article, we highlight a few of the common mistakes couples can avoid, both in marriage and divorce.When money is properly managed and families plan for foreseeable life events, wealth can accumulate and be transferred to the next generation. For every decision in family economics there is an opportunity cost in not taking advantage of income and wealth management options. When couples divorce, emotions can run high and affect the better judgment that should oversee decisions involving money, property, businesses and assets. Where there are future income and tax consequences for financial decisions in divorce, the experience and advice of legal counsel can help couples prevent loss and waste of money and opportunity. In this article, we highlight a few of the common mistakes couples can avoid, both in marriage and divorce.
Money management mistakes of which to be aware in marriage.
Not having a premarital agreement
There is a misconception that premarital agreements are only for wealthy couples getting married. A premarital agreement can be used to avoid a variety of disputes should the marriage later come to an end. In a premarital agreement, you can keep finances separate, protect one another from debt, provide for children of prior marriages, define who gets what in a divorce and preserve the integrity of wealth management and estate plans.
Not engaging in estate planning
During the marriage, every couple should work with an estate planning attorney to prepare a will and trust to hold property and create legal obligations to safeguard money and property from events that jeopardize wealth management goals. Estate planning is important when it comes to tax implications in the future.
Failing to work as a money management team
Teamwork in a marriage should be more than the division of family duties, and couples who treat the marriage like a business partnership can grow and manage money that creates its own income. When you and your spouse frequently review the full scope of the family finances, new ideas and opportunities may be discovered and seized.
Wealth preservation mistakes to avoid during divorce.
Listening to emotions and opinions
When family and friends discover a divorce, many offer their unsolicited advice and consolation. Since no two divorces are the same, what happened to another is may not be relevant to your divorce and the unnecessary anxiety can cloud our judgment. While decisions of love come from the heart, decisions about money should come from logic and reason.
Agreeing to anything to expedite the process
The circumstances surrounding the breakdown of a marriage can be taxing on even the strongest people. Some may be inclined to quickly agree to whatever the other spouse wants, in hopes that the divorce can be resolved quickly and everyone can move on. Leaving money on the table just to get away from someone is a decision many live to seriously regret.
Hiding money and thwarting disclosures
When couples do not share equal roles and responsibilities in wealth preservation during the marriage, it is too easy for one spouse to divert money and hide assets and accounts from the other. With increases in technology and asset investigations, it is easier to recover more hidden money. When in divorce a spouse is proven to have hidden and wasted community assets and property, the consequences can be significant.
Failure to investigate tax and income consequences
Every financial decision has a consequence and when it comes to paying taxes and losing future income, every divorcing couple should avoid the mistake of failing to forecast the impact of divorce decisions on money owed and money earned. Experienced divorce attorneys can use divorce financial professionals to help guide clients in the short and long-term implications of financial decisions.
With additional information about building and preserving money for your family now and in the future, Scroggins Law Group provides advice and counsel along with the right financial professionals who can help guide you in both marriage and divorce.
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Mark Scroggins, and the team at
Scroggins Law Group represent clients in a variety of divorce and family law matters.
At Scroggins Law Group, we have more than 24 years of experience with family law cases in Dallas, Denton and Collin Counties. When you retain our firm, you can trust that your case is in the hands of a highly skilled, dedicated professional. We understand the unique challenges of a high value divorce case, and more importantly, have the knowledge and experience you need on your side. Call us today, (214) 469-3100, to learn more about Texas divorce and family law.