Denver Home Living Huettner Capital Fall 2018 | Page 33

7 Costly Divorce Mistakes and
How To Avoid Them
W
BY TODD HUETTNER
hile many people get divorced, most don’t
really know much about the specific legal and
financial aspects of divorce. The result is a lot of
misinformation that creates problems that can
take years to resolve. If you or someone you know is dealing with
a divorce, watch out for these costly mistakes:
1. Thinking you agree on everything–This is the single biggest
misstep people make. You may agree on everything you know to
talk about, but what are you missing? How will things change
down the road? Even if you do agree, your entire agreement must
be in writing to be valid.
2. Relying on friends for advice–After 15 years of working with
clients, I can tell you that most people make mistakes during
the course of their divorce. Therefore, relying on friends whose
only credential is having been divorced is not a plan for success.
Friends can offer much needed support and advice, but you need
help from specialists to get you through the process successfully.
3. Assuming your attorney/CPA/financial advisor can handle
things – Not necessarily. While some have targeted expertise
and experience, attorneys focus on law, CPAs focus on taxes,
and financial advisors focus on investments. Rarely do they
know how to separate a couple’s financial lives from one another
without hurting their credit.
4. Feeling you can’t afford specialists–What you really can’t
afford are mistakes. Most people vastly overestimate the cost of
hiring professionals and vastly underestimate the cost and risk of
mistakes. Even the smallest mistakes can cost far more than the
cost of a specialist, while a big mistake can cost you hundreds of
thousands of dollars and even lead to bankruptcy.
5. Planning to fix mistakes later–Some mistakes cannot be
fixed, and even when they can, the process can be costly and
time consuming. Save yourself a lot of time, money, and tears by
getting it right the first time.
6. Believing your decree eliminates credit liability–You are still
liable for the full amount of all individual and joint debts in your
name, regardless of what the decree says. Any late payments will
affect your credit, and you will be responsible for any deficiency
judgment. Holding your ex in contempt of court for failure to
pay will not fix anything. Your credit will be destroyed and may
take years to repair.
7. Trusting credit monitoring to protect you–Credit monitoring
only tells you about problems after the fact when a payment is
already 30 days late or more. It will not fix your credit nor will it
lower the cost of poor credit.
Divorce is a serious life event that requires serious attention. However, it has become so common that many people have a false sense of security and
do not seek the specific legal and financial help needed to avoid mistakes. If you or someone you care about may be headed for divorce, I urge you
to please share this list with them.
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