Possible Financial Pitfalls In Property Division

People in Kansas who are getting a divorce can avoid some common pitfalls involving finances. One error is not getting life insurance on a spouse who pays child support or alimony. This can be an important protection if the spouse dies and that income is no longer available.

Many other common mistakes are related to property division. In a divorce, one person will often decide to keep the home and let the ex-spouse keep an asset of equal value. The trouble with this is that in valuing the two assets, the person might not take the cost of upkeep on the home into account. Therefore, a retirement or brokerage account with the same amount of cash in it as the home is worth may actually be more valuable. Another common error that can be made around home ownership is failing to consider whether the mortgage and upkeep of the home is manageable on a single income.

When people divide a 401(k), they might fail to get a court order called a qualified domestic relations order. This allows for a withdrawal to be made from a 401(k) without a penalty. Another possible error with a 401(k) is assessing its value next to a checking account or other more liquid asset without considering that withdrawals will be taxed.

Property division may be negotiated by a couple and their attorneys during a divorce. One advantage of this approach is that it allows the couple more control over the process than they would have in litigation. However, people may want to discuss their goals and strategies for these negotiations with an attorney ahead of time. This can be an emotionally tumultuous time, and it can result in some people making poor decisions for the long term if they are trying to get the divorce over with quickly.