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Financial mistakes to avoid in a divorce settlement

On Behalf of | Feb 28, 2022 | Divorce In Tennessee |

Tennessee allows couples to play a role in the terms of their divorce settlement. The couple must agree on the terms, and the judge must confirm it’s fair. Tennessee is an equitable distribution state, which means the judicial system divides marital property based on what’s fair rather than favoring a 50/50 split. However, you should still learn about how to protect your interests in a divorce to ensure you receive a fair settlement.

Not hiring a mediator

Negotiations are challenging when you don’t have a mediator. It’s easy for emotions to get the best of you or your spouse, and when one loses control over their emotions, the other side often also loses control. A mediator stays calm and calls for a break if emotions start to get too intense between the couple.

Hiding assets

It’s illegal to hide assets when you’re going through a divorce. You must disclose all marital property that you own. State law considers any property that you acquired during the marriage as marital property. Exceptions to this are gifts, inheritances and awards of civil damages. If you had an asset before marriage that accumulated capital gains during the marriage, the capital gains are marital property. You could hire a forensic accountant or an attorney who knows how to find hidden assets to check if your spouse has any hidden assets.

Missing marital debts

Just as you should know about all assets, you need to know about all marital debts before coming to a divorce settlement. Both spouses are legally responsible for their debts even if only one took on the debt during the marriage. Divorce doesn’t necessarily mean you are no longer responsible for your spouse’s debt. You should obtain a credit report from all three of the main bureaus for both you and your spouse to ensure that you don’t miss a debt.

Having an accurate view of the debts and assets is essential in drafting a fair divorce settlement. You should also work with a mediator to help you come to the best possible agreement for both sides.