Del Mar LPL Financial Advisors Explain The 8 Possible Financial Consequences Of Divorce And How To Avoid Them, PART 3

This four-part article series explains the many financial pitfalls associated with divorce and how women can best avoid them through careful research and the right planning.

Welcome to the third installment of this four-part article series on the possible financial consequences of divorce and what women can do to avoid or at least offset them.

Divorce has a plethora of financial consequences and most of them are bad, especially for women who are said to suffer a 27% drop in their standard of living, while men experience a 10% increase. The reason?

Many women suspend or don't prioritize their careers so that they may care for the family and the home. And so the household relies predominantly on the income provided by the husband. When disaster happens, the fight for financial survival becomes a terrifying prospect for women, especially if she becomes the primary caretaker of the children.

Thankfully, with the right planning and research – and with the help of a good Del Mar financial planner - the stormy seas of divorce aftermath can be tamed to make for smooth financial sailing, so let's continue looking at more, important advice.

Consequences of Divorce # 5: Ignoring Tax Consequences

Every possible financial decision involved in divorce comes with some kind of tax consequence that can actually see you walking away with substantially less than your spouse! Is walking away with a lump sum better than taking monthly alimony? Which asset would you rather have? Is it better to keep the house and live in it, or sell it and split it 50/50? Who pays for what?

What You Should Do

You and your spouse should sit down with an accountant and make all the necessary calculations, making sure that the tax consequences are taken well into account. You may want to apply for an indemnification clause to protect yourself should the IRS come a-knocking. There's always a risk that a past joint tax return wasn't entirely correct and you don't want to be the one who pays the penalty.

Just remember this: Tax can be exceptionally tricky to work out, so unless you have an accounting diploma behind your name, you may want to get a professional involved in helping you and your ex figure this picture out.

Consequences of Divorce # 6: Confusing Money and Emotion

Under ordinary circumstances, it can be really difficult to prevent your emotions from clouding your judgment. Now try to do the same with all the changes and emotional turmoil associated with divorce!

It can be too easy to allow your emotions to drive or change your financial decisions. It can also be tempting to confuse your lawyer with a friend or therapist. A friend doesn't charge you a few hundred dollars an hour to listen to your woes, so keep your appointments short, yet thorough. Make a list of the points you wish to cover and avoid any emotional triggers that might have you breaking down. This way you'll get the most out of your sessions with your Del Mar asset management firm and lawyer and maximize what you get out of every dollar spent on professional advice.

What You Should Do

• Be businesslike in your financial decisions
• Don't allow feelings of anger or guilt motivate you
• Use your friends, family and therapist for emotional support
• Focus on your long-term wealth and wellness
• Try to keep things as professional and amicable as possible. Only lawyers benefit from nasty divorces

Stay Tuned for Part 4

Not fighting for what's rightfully yours and mixing money and emotions… To read some final possible financial consequences of divorce for women, stay tuned for the fourth installment of this four-part article series.