{"id":1454,"date":"2018-12-03T06:36:11","date_gmt":"2018-12-03T14:36:11","guid":{"rendered":"https:\/\/www.arwanilawfirm.com\/?p=1454"},"modified":"2019-03-13T09:05:38","modified_gmt":"2019-03-13T16:05:38","slug":"what-are-the-most-important-financial-mistakes-to-avoid-during-divorce","status":"publish","type":"post","link":"https:\/\/www.arwanilawfirm.com\/what-are-the-most-important-financial-mistakes-to-avoid-during-divorce\/","title":{"rendered":"What Are the Most Important Financial Mistakes to Avoid During Divorce?"},"content":{"rendered":"
Because divorce<\/a> can be such a difficult process, it is understandably easy to lose sight of the need to make wise financial decisions before, during, and after the process. As a result, we, as attorneys who regularly practice in this area, sometimes find ourselves having to clean up some of the consequences of these decisions. Below, we discuss the most important financial mistakes to avoid during divorce:<\/p>\n Major Purchases<\/strong><\/p>\n Avoid buying major items, such as a new car or home. While this item may have been affordable before, you will likely have new bills and other expenses to cover post-divorce.<\/p>\n Cashing In On Investments & 401(k)<\/strong><\/p>\n Be careful about cashing in on investments and other assets in order to pay bills. You may end up with unforeseen tax consequences as a result. In addition, given that those assets will no longer be invested, they may steer you off-track in terms of the various long-term financial goals you and your attorney mapped out.<\/p>\n This also applies to your 401(k)\u2014if you cash in on any funds that have not yet been taxed, you could not only get hit with a large tax bill, but you could face the IRS penalty on everything that is withdrawn before you reach the age of 59 \u00bd. Keep in mind that if you are receiving some portion of your ex\u2019s retirement accounts via a qualified domestic relations order (QDRO), you can place it into your own IRA account and avoid paying taxes on it.<\/p>\n Remember that it isn\u2019t just a one-time tax penalty, cashing in on these funds can place you in a higher tax bracket, which can also have additional consequences (such as increasing your student loan payments if you are on income-based repayment).<\/p>\n