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Financial mistakes to avoid when getting a divorce

On Behalf of | Jul 24, 2019 | Property Division

When it comes to divorce in Wisconsin, trying to navigate financial separation can increase the tension. Sometimes the negative emotions arise from not just deliberately malicious behavior but financial mistakes on both parts. This can put the financial future of both parties at risk. If there are children involved, this can make matters even worse.

CNBC notes that one of the biggest mistakes that divorcees make is holding on to a house they can no longer afford. In the past, one or two incomes combined to pay one mortgage or rent. After divorce, that same income will need to maintain two. The question is: can it?

An extension of this mistake is when people choose to take the house instead of liquid assets, such as a brokerage account or retirement account. A house is a worthy investment, so the two may look equal on paper. However, even without a mortgage, homes require liquid assets to maintain them. Will the spouse keeping the home have enough to do so?

Sure, they can sell the home, but that depends on whether or not they can secure a buyer at the time they need one without settling for less than the house is worth. Multiple news articles across America have reported on the decline of the housing market due to a slow in buying for a number of reasons.

Business Insider also reminds divorcees that there are nine states considered community property states where one spouse is entitled to half of all marital assets. Wisconsin is one of these states where individual assets combine in a marriage, regardless of who earned what. There are some exceptions to what counts as marital property, but for the most part, couples should prepare for a 50/50 split.

This article provides information on financial mistakes in a divorce. It should not be misconstrued as or used in place of legal and financial advice.