Women often react emotionally to divorce, and as a result lose sight of their financial interests.
Here are the top five mistake women make during divorce.
1. Not having a clear understanding of the finances
For women who aren’t really sure how much money their husband makes or what kind of savings or investments they have as a couple, it can be easy to lose out in a divorce. Don’t take that risk. Keep up with financial changes and with all of the accounts you have jointly and separately. That can reduce the risk that your spouse will try to move or hide money before the divorce, denying you legal access to it.
2. Giving in because of emotional exhaustion
Emotions can definitely run high during a divorce, and some proceedings can continue for months before a final decree is reached. Women who get completely exhausted from the process may just give in, so they can be done with it. That’s understandable emotionally, but it’s generally a bad move financially. Instead of giving in, find ways to de-stress and keep going until a fair and just agreement is reached.
3. Deciding not to use an legal help
Among the most serious financial mistakes a woman can make during divorce is not using taking legal advice to help them through the process. Even if the divorce seems very amicable at first, things can quickly change. Without proper representation, you will be completely unprepared when your spouse decides to take legal advice and take the majority of the money and possessions. You can prevent that from happening by getting the right legal advice from the start.
4. Splitting the total pension pot rather than the retirement income
Women often agree to split their partner’s total pension pot in half, however in many cases they will need more than half to receive the same level of income in retirement, especially if they do not have the earning capacity to continue growing their share. Women should look to take an equal share of the income, which is determined by a number of factors including a person’s age, health and lifestyle, rather than half the capital.
5. Accepting asset valuations at face value
There is a legal requirement for both parties to fully disclose the value of their assets in divorce proceedings. However, valuing assets such as pensions and businesses can be complex and there are ways to hide their true value. Many people do not know how to properly value pensions and there are different ways to value businesses that do not take account of all the assets. Make sure your partner submits all supporting documentation when declaring their assets. If in doubt, have a financial adviser or accountant check the figures.