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Financial pitfalls to watch out for in divorce

People in Colorado who are getting a divorce should have a good understanding of their finances. This means having copies of things like bank statements, tax forms and statements from retirement accounts. Pulling a credit report is a good way to get a handle on all debt. People should keep in mind that credit card companies will hold them responsible for debt that is in their name even if the court says the former spouse must pay it.

Some people may never have been responsible for family finances, and others may simply have complicated finances. In both cases, it might be helpful to hire a financial planner or another professional to assist with this aspect. Speaking to a divorce lawyer is also a good idea.

There are a few common errors that people make. One is failing to take taxes into account. For example, taxes on a retirement account can reduce the value of that asset, so people should keep this in mind as they are negotiating property division. It is also important to let logic rather than emotions guide decision making. People going through a divorce often make poor decisions out of anger or guilt. They may also make decisions in hopes of getting the divorce over with quickly. It is important to keep in mind that it may take time to complete the process.

No two divorces are alike, and in addition to these general precautions, there may be complications based on a couple's particular situation as well. For example, one spouse may attempt to hide assets from the other. This can be as simple as giving money to a relative to hold onto or as complex as shell corporations and hidden investments. The couple might own a business together or real estate in another state, or there might be complicated investments that must be split. An attorney might be helpful in addressing these issues.

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Cooper, Tanis & Armas, P.C.
42 Garden Center
Broomfield, CO 80020