When you’re caught up in the heat of a divorce, it can be easy to give into the emotional and mental pressure of the situation. That pressure can lead you to make decisions that seem right in the moment but which are not as helpful down the road. Alimony is often a highly-contested issue in divorce and one area where emotional decision-making can take a toll.
One big mistake people make when working with alimony negotiations is that they use it as a form of payback. They try to keep the other person from getting support that is realistic or they attempt to stick the ex with a huge alimony bill. Taking this tactic can cost you in both the short and long run. First, dragging your divorce out needlessly for revenge purposes can cost everyone time and money. Second, it’s a way to guarantee you’ll never develop a civil relationship with your ex — something that is especially challenging if you have children together or run in the same professional or social circles.
Another common mistake couples make regarding finances during divorce is that they look at each item individually and fail to consider the entire picture. Alimony, for example, has tax implications. Whether you’re paying it or receiving it, make sure you understand how it will impact your returns before you settle on an agreement. It’s also worth noting that you can’t get too creative with alimony — a single lump sum out of the marriage property now in lieu of alimony later could cause serious tax implications.
One way to reduce the negative impact of emotional decision-making is by working with a divorce lawyer. He or she can step in to ensure the big picture is looked at and decisions are likely to be favorable in the long-term.
Source: USA Today, “5 biggest divorce mistakes financially,” Wendy Spencer, accessed Dec. 09, 2016
