Connecticut couples who are going through a divorce may be able to reduce the financial burden by avoiding some common mistakes. One of those mistakes is spending too much money. Making large purchases can feel comforting in the short term but less so after the bills are due and there is only one income to pay them.
Another mistake is not realizing that alimony will no longer be tax-payable or tax-deductible if the divorce is finalized after 2018. This may mean less money all around. However, people should not try to avoid paying alimony by quitting a job since this will cost even more over time.
It is important for people going through a divorce to understand their financial situation and tax issues. Selling off assets to pay bills can be tempting, but there could be taxes on the sale. Taxes and penalties can also be an issue in taking a distribution from a 401(k) unless there is a document called a qualified domestic relations order and an IRA that the distribution can be rolled into. Some people might fight to keep the family home only to find that they cannot keep up with the mortgage and the cost of upkeep. Many of these mistakes can potentially be avoided by sitting down with a financial professional and making a financial plan.
Having this plan will help when it comes to negotiating property division. Since this can be an emotional process, a financial plan will help keep a person focused on financial goals. There are several possible advantages to negotiating over litigation including lower cost, a quicker resolution and an outcome that is more likely to please both parties. However, if negotiation is not possible or breaks down, or if the couple can agree on some points but not others, they might have to go to court.