The Biggest Financial Mistakes People Make in Divorce and How to Avoid Them
- Lisa McNally
- Jul 27
- 3 min read
Divorce is not just a legal and emotional process—it’s also one of the most significant financial turning points in a person’s life. The decisions you make during divorce can impact your finances for years to come.
At Optimal Divorce Solutions, I work with clients across the U.S.—especially those in high-net-worth and gray divorce cases—to avoid common financial mistakes and walk away with clarity, stability, and confidence in their future. Let’s explore the most frequent financial missteps I see and how to sidestep each one.
Underestimating Future Expenses
Why It's a Problem
Many people focus so much on dividing current assets that they overlook how their post-divorce lifestyle will actually look and cost.
How to Avoid It
Create a post-divorce budget based on realistic living expenses
Factor in housing, insurance, retirement contributions, taxes, and healthcare
Consider inflation and changing needs over time
Fighting for the House (Without Doing the Math)
Why It's a Problem
Keeping the marital home can seem emotionally comforting—but if it becomes a financial burden, it can turn into a liability.
How to Avoid It
Evaluate if you can truly afford the mortgage, taxes, and upkeep
Consider selling and dividing equity instead
Work with a Certified Divorce Real Estate Expert (CDRE) to assess options
Not Understanding Tax Implications
Why It's a Problem
Dividing retirement accounts, selling property, or receiving spousal support all have potential tax consequences.
How to Avoid It
Consult a CDFA® or CPA early in the process
Understand how capital gains, income taxes, and alimony rules affect your settlement
Use a Qualified Domestic Relations Order (QDRO) for splitting retirement accounts
Ignoring Hidden or Complex Assets
Why It's a Problem
Business interests, restricted stock, cryptocurrency, or deferred compensation plans can be overlooked—or intentionally hidden.
How to Avoid It
Work with a divorce financial professional to uncover all assets
Review tax returns, bank statements, and business documents thoroughly
Consider hiring a forensic accountant if needed
Forgetting About Debt
Why It's a Problem
Many people focus on assets and forget that marital debt must also be divided—and creditors may still come after you even if your spouse was "assigned" the debt.
How to Avoid It
Identify all debts, including credit cards, loans, and lines of credit
Try to pay off shared debts before finalizing the divorce
Refinance or transfer debts into individual names when possible
Overlooking Retirement Planning
Why It's a Problem
Divorce can derail retirement goals if you're not strategic.
How to Avoid It
Ensure fair division of retirement accounts
Rebuild your retirement savings as soon as possible
Adjust your investment strategy to match your new goals and risk tolerance
Making Emotionally Driven Decisions
Why It's a Problem
Divorce stirs intense emotions, but financial decisions based on anger or guilt often lead to long-term regret.
How to Avoid It
Separate emotion from financial decision-making
Work with professionals who provide objective guidance
Focus on long-term goals, not short-term wins
Not Working with the Right Professionals
Why It's a Problem
Relying only on your attorney may leave financial gaps unaddressed.
How to Avoid It
Partner with a Certified Divorce Financial Analyst (CDFA®)
Engage a Certified Divorce Real Estate Expert (CDRE) if property is involved
Use divorce mediation or coaching for a more informed, empowered process
Understanding the Role of a CDFA® in Divorce
What to Do If Your Spouse Controls the Finances
How to Track Down Hidden Assets in Divorce
Key Takeaways
Financial mistakes during divorce can have lifelong impacts if not handled carefully
Budgeting, understanding taxes, and identifying all assets are key
Don’t overlook debts, retirement planning, or emotionally driven decisions
Work with the right professionals—like a CDFA®, CDRE, or divorce coach—for clarity and protection
If you’re preparing for or currently navigating divorce, don’t go it alone. I’m here to help you avoid these financial missteps and move forward with confidence. Let’s protect your future—starting now.
Lisa McNally
Certified Divorce Coach | Certified Divorce Mediator
Certified Divorce Financial Analyst (CDFA®) | Certified Divorce Real Estate Expert (CDRE)
Licensed Real Estate Broker (NH & ME)
Founder, Optimal Divorce Solutions
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