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Divorce can lead to financial mistakes

Almost all families in New Hampshire experience difficult patches. While some eventually overcome such problems, others decide that it is in the best interest of all involved to seek a divorce. Regardless of both sides' willingness to seek an amicable split, the process can still be painful, prompting some people to rush through the process. Unfortunately, rushing through could have a significant impact on a person's overall financial situation.

One of the first mistakes a person can make when dividing assets is making decisions based on his or her emotions rather than what is financially practical for his or her financial situation. For example, a person may want to keep the house even though he or she may not have the financial assets to maintain the house. If assets are appraised by a professional, couples seeking divorce are better prepared to negotiate based on the actual value of the assets as opposed to their emotional attachment.

Some claim that it is also inadvisable to dip into retirement savings in order to settle a divorce. Reports indicate that many people are ill-prepared for retirement as it is; using retirement savings only worsens that situation. Additionally, using an IRA to pay off debt, for example, can result in additional complications due to penalties and taxes.

Because some people may not think clearly as they go through the divorce process, many in New Hampshire seek the help of experienced professionals to advise them as they negotiate and make important decisions that could have a significant impact on their financial future. Involving professionals can help ensure the person is fully aware of the long-term ramifications of each decision. These professionals can help prevent costly mistakes that are, in some cases, irreversible.

Source: thefiscaltimes.com, "6 Money Mistakes to Avoid When You're Getting a Divorce", Kelli B. Grant, Aug. 26, 2016

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