Common Mistakes in Divorce Financial Planning
- Assuming a 50/50 property division equals fair distribution.
- Holding onto the house despite financial inability.
- Addressing financial matters in isolation rather than understanding their interconnectedness.
- Neglecting to secure alimony and/or child support payments with life insurance.
- Forgetting to transfer life insurance ownership to the recipient of alimony and/or child support.
- Believing settlement terms must mimic court orders.
- Seeking financial guidance from legal experts.
- Overlooking pension asset options.
- Ignoring future transaction costs in settlements.
- Relying on unrealistic inflation and investment return assumptions.
- Assuming accessing retirement assets before age 59 ½ always incurs IRS penalties.
- Failing to explore innovative financial solutions.
- Forgetting to assess post-divorce financial security before finalizing agreements.