Mar 22

6 Crucial mistakes you simply cannot afford to make when divorcing your husband

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We all know that divorce is a very difficult time for everyone concerned. It’s emotionally draining and can be an overwhelming experience, especially when you don’t know what exactly the future will bring. Did you know that divorcing someone ranks almost at the top of life’s most stressful events, second only to the death of a spouse?

Unfortunately, it’s also a crucial time to keep your wits about you in order to achieve an outcome that will protect your long term financial security. According to research, the divorce rate among baby boomers has reached an all time high, which particularly affects women approaching retirement age and makes them vulnerable to financial insecurity.

Ladies, if you’re going through a divorce, whatever the exact circumstances and however amicable or otherwise your relationship with your ex may be, now is not the time to fall apart. Take a look at these six biggest mistakes that women tend to make in divorce settlements and learn from them, without feeling regretful a few years down the line.


Not using a solicitor

Couple with divorce solicitor

No-one likes to spend money on solicitors if it can be avoided but divorce is one situation where the budget option can backfire badly. While a DIY divorce may be cheaper in the short term, not obtaining proper legal advice could cost you dearly in the longer term. It’s all too easy to make assumptions that everything should be split 50/50, or agree something with your spouse without taking independent legal advice, in the interests of an easy life.

But how do you know what would constitute a fair settlement for you in law, what your entitlements would be and how to go about safeguarding your future financial position? With the best will in the world, the last person you should trust to look out for your best interests now is your ex partner. You need independent advice from an experienced divorce lawyer.


Accepting asset valuations at face value

Divorce meeting

There is a legal requirement for both parties to provide full disclosure of the value of their assets in divorce proceedings. Wives are often very trusting of their husbands, even when it comes to divorce and there is an argument to suggest that it would be naïve to believe anything he tells you now about the family finances.

From valuations of the former matrimonial home, pensions and any business assets, you need a complete, objective picture of what’s in the matrimonial pot, before it can be decided how to divide it between you. However, with the ever present temptation to undervalue or under-declare assets, it is essential that you double-check the figures and have them verified by your own professional adviser.


Not knowing about existing debts

Woman with her head in her hand

Just as you need to know the full extent of the matrimonial assets, it is essential to know what outstanding debts you have, both jointly and individually. From credit card debts, finance on cars, overdrafts, personal loans and of course mortgages, many women are unaware that they can be held jointly responsible, even for debts that are in their ex partner’s name.

As a sensible precaution, it is advisable to cut all financial ties with your ex as soon as possible. No more joint accounts, credit cards or savings accounts – the risk of any adverse effect on your credit rating is just not worth taking.


Focusing on the house

Home exchanging hands

It is perhaps no surprise that women tend to have a greater emotional attachment to the family home, particularly if they’ve been home makers and there are children involved too. But rather than trying to cling on to the home at any cost, it’s advisable to take a wider view to ascertain if this is really the best financial option for you in the long run.

Many wives prefer to stay in the family home and ignore their husband’s pension but in many cases this is a short sighted solution. Taking on the entire outgoings and mortgage may have disastrous financial consequences if it isn’t affordable. Downsizing to a smaller property and taking a share of their ex partner’s pension will ensure that there is an income to support your retirement, especially if spousal maintenance ceases at retirement age.


Not recognising the importance of pensions

Unhappy Senior Couple

Pensions can be the single most valuable asset, and yet they’re often underappreciated for what they can deliver. A common mistake is to take a share of your ex partner’s total pension pot at the time of the divorce, rather than a share of the level of retirement income.

It is a big mistake to assume that half the pension capital creates equal retirement income. The latter is determined by a number of factors such as a person’s age, health and lifestyle. Take another look at your spouse’s pension and discuss the implications for yourself with an independent financial adviser.


Not obtaining a formal consent order

Couple signing forms

All negotiations and financial agreements between you and your soon to be ex husband should be formalised by the court in a consent order. This court order is an important document and should also include a pension sharing order to protect your pensions interest in case your ex husband passes away. An informal agreement not endorsed by the court is neither binding nor enforceable, even if you’ve both signed it.

Without a signed consent order, either party can try to go back on the agreement and make further demands for income or assets down the line, even if they’ve been acquired after the end of the marriage. The court would then judge the application on the basis of the ex partners’ respective financial positions at the time of the application, not at the time of the divorce. Make sure you protect yourself from the risk of any nasty surprises to protect your future assets.


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