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Family law proceeding of divorce can be complicated financially

The divorce process in New Jersey understandably can feel lengthy and unpleasant even when the two divorcing individuals are relatively amicable. However, it is still normal for people to want to rush through this type of family law proceeding so that they can more quickly move on with their lives. Although speeding through the process may be tempting, slowing down and following a couple of essential steps can help a person to avoid making financially costly mistakes.

First, it is wise for a divorcing individual to get rid of joint beneficiary designations and accounts, as these can be a major liability once the person decides to divorce. For instance, a person's future ex might choose to withdraw all money from their joint bank account. In addition, a future ex might quit making mortgage payments to force one to give up one's interest in the martial property. Once a person chooses to get divorced, it is expedient for him or her to open an individual account so that his or her future income will remain separate from that of the other spouse.

One common mistake during divorce is for a person to raid retirement by tapping retirement accounts for the purpose of funding divorce-related bills or paying off joint debts. However, this is generally not a wise idea, as only nearly 50 percent of households possess enough savings to be ready for retirement. In fact, a 2005 study showed that baby boomers who were divorced saw a 77 percent drop in their wealth compared to when they were still married.

Going through the family law proceeding of divorce can seem complicated, especially for those in New Jersey with high-value assets. However, taking steps to protect oneself financially increases one's chances of having a good quality of life after the divorce. An applied understanding of the law may help a person to pursue the most personally favorable settlement possible when dissolving a marriage.

Source: thefiscaltimes.com, "6 Money Mistakes to Avoid When You're Getting a Divorce", Kelli B. Grant, Aug. 26, 2016

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