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4 tips for minimizing the financial impact of divorce

To financially survive divorce, spouses should inventory marital assets, create post-divorce budgets, limit costs and consider seeking representation.

As many people in Troy can attest, divorce can be financially devastating, even for people who previously enjoyed a high level of financial stability. The divorce process can introduce unavoidable expenses, and the cost increases associated with living alone afterward can also be significant. Fortunately, separating spouses can reduce their risk of experiencing financial strife by taking the following steps during divorce.

1. Keep careful track of shared assets

It isn't uncommon for divorcing spouses to lose out on high-value marital assets that they are partially or even fully entitled to. Forbes notes that this may occur when the other spouse makes an attempt at hiding marital assets that should be split during divorce. In other cases, spouses may simply overlook or forget about these assets.

To avoid this issue, spouses should become as familiar with their marital finances as they can. If possible, spouses may want to gather or request financial documents, such as income, bank and brokerage statements, before giving notice of the divorce. This can help spouses ensure that all assets are taken into account during the settlement or litigation process.

2. Realistically assess future expenses

To prepare for life after divorce, spouses should evaluate their current financial standing and the changes that may occur after the divorce. Spouses should take all of the following into account:

  • Per-person costs that should remain essentially the same, such as groceries and transportation
  • Per-person expenses that may increase sharply, such as insurance and housing
  • Costs associated with the divorce, such as legal fees, taxes or alimony

The Wall Street Journal notes that spouses should also assess the hidden expenses that may come with seemingly desirable high-value marital property, such as real estate. Spouses should question whether they can afford costs such as upkeep, insurance and taxes before pursuing an asset.

3. Limit unnecessary legal costs

When possible, spouses should be careful to avoid incurring unnecessary expenses through protracted litigation. In some cases, spouses may secure a greater share of assets or a more favorable award of alimony by settling the issue in court. However, spouses should be careful to avoid making emotionally motivated decisions, such as engaging in disputes to punish the other spouse.

4. Know the relevant laws

It's also advisable for divorcing spouses to protect themselves financially by understanding their legal rights. In New York, spouses are entitled to an equitable share of marital property. In some cases, spouses may also be eligible for temporary or post-divorce maintenance. Spouses can benefit from understanding the relevant laws so that they can seek a reasonable settlement during divorce.

In many cases, partnering with an attorney may be the surest way for spouses to avoid making costly financial missteps during the divorce process. Some spouses may be reluctant to incur additional costs by seeking representation. However, the gains that come with an appropriate settlement may easily make up for any expense associated with hiring an attorney.

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