3 Common Mistakes in Divorce Settlements

When going through a divorce, the heartbreak doesn’t end in your relationship with your partner. Separation can impact every other aspect of your life, from your children, assets, and even your home, making divorce a devastating experience in more ways than one. While you can’t simply choose to forget about the divorce and move on, there are things you can do to improve your quality of life during the process.

One of the most important things to remember is to get the right help you need during a divorce settlement, especially when it comes to matters involving your marital house. In order for you to successfully negotiate the complexities and emotions of your divorce settlement, you need to know what’s at stake, both emotionally and financially.

Divorce Settlement Mistakes

While most fight tooth and nail to keep their marital home in Kentucky, there are common mistakes that may leave you with more than a hole in your heart. To avoid running into more problems, here are some mistakes to avoid during your divorce settlement:

1. Fighting For Your Right to the Marital House for Sentimental Reasons. Your relationship is over and your partner is gone, but the home partnership you once shared is still living in your head. The memories you made are truly worth keeping, but don’t argue to keep the house if you don’t have the financial independence to afford to pay for the property for years to come. Instead of obsessing about the house, it’s better to redirect your focus to your financial capabilities and see whether you have the means to provide a comfortable life as you move on from the divorce.
2. Ignoring the Tax Consequences. Another common mistake people make is not considering the tax consequences of selling the marital house, which also includes the amount of money you’d have to pay for capital gains tax. For example, if you live in the marital house for more than three years after the separation but sell it at the end of the three years, you’ll have to pay capital gains tax on the appreciation of the house.
3. Failing to Make a Budget for the Marital House. The process of divorce is long and complicated. While it is important to fight for your rights, you need to know that there won’t be a winner in every battle. You may have to make changes in your expectations, especially when it comes to how you’re going to pay for the house. Continuing to live in the marital house without considering the cost of running the house can lead to financial difficulties down the road. It’s best to have a running budget for the marital house so you can see if it will be feasible for you to continue living in the house after the divorce. If it’s not, you can look for a new home that will suit your needs without spending too much.

The Bottom Line: Think About Your Means and Future When Settling Your Divorce

There is no set rule as to what you should get in your divorce settlement, but make sure you keep things in perspective. Divorce is a drastic step, but this doesn’t mean you should make decisions based on how you feel at the moment. Make calculated decisions that will guide you in the future.

How Can We Help at American Mortgage Solutions?

If you are looking for a mortgage company in Cape Coral, Louisville and beyond then you have come to the right place. As a Certified Divorce Lending Professional, American Mortgage Solutions can provide you with the financial knowledge and understanding of Divorce and Family Law, IRS Tax Rules and mortgage financing. We offer a wide range of services that can help you with all of your real estate needs, so get in touch with us today at (502) 327-9770 in Louisville or in Florida (239) 766-8344 and see how we can finance the home of your dreams!