The settlement of a property can be a rather tense affair and there are certain risks that one has to avoid at all costs.
These are some of the common mistakes that people make during the negotiations and knowing them can make for a better and fair deal.
Below are some of the possible problems likely to be experienced in the course of property settlements and guidelines on how to prevent them.
1. Lack of Proper Documentation
The most frequent mistake that is made in property settlement is lack of proper and comprehensive information and documentation.
These are financial statements, property valuations and any other documents that may be relevant in the case.
Thus, without these, it becomes quite challenging to determine the net worth of the assets and liabilities, thus creating conflicts.
How to Avoid It:
The authentication of all the required documents should be done prior to the commencement of the negotiations.
The items include, but not limited to, bank statements, property deeds, tax returns and any other financial documents.
Business owners can engage the services of a professional like an Accountant or a Property Valuer hence this document can be accurately prepared.
2. Underestimating the Value of Assets
Undervaluing the assets particularly the real estate may result to unequal division of the property.
This is mainly because, the parties in the agreements do not seek professional valuations of their properties.
How to Avoid It:
It is always advised to get professional appraisals for any asset that is valuable and might be under agreement such as real estate, businesses and valuable personal property.
A professional valuer will be in a position to give a credible market value of the asset which will be useful for the partition.
3. Overlooking Hidden Liabilities
Issues that could be the company’s shame include unpaid dues or undeclared taxes, which might pose a challenge during the settlement process.
If, for instance, these are not considered, one of the parties may be forced to bear the brunt of the financials.
How to Avoid It:
A detailed analysis of all the financial commitments that include the debts, loans and the possible tax liabilities.
It is also recommended to involve a financial advisor or an accountant who will be able to identify all the possible risks and make sure that they are taken into consideration in the settlement.
4. Emotional Decision-Making
Reasoning behind this can be attributed to the fact that property settlements are some of the most contentious matters, and people make decisions based on their feelings rather than logic.
Thus, they may sign contracts that are unfavorable for them financially.
How to Avoid It:
Therefore, when handling the settlement process, it is recommended to have a rational and systematic thinking.
It may be useful to involve a third party like a mediator or a counselor to deal with feelings and concentrating on the solution.
Legal professionals can also give neutral information that would help in making decisions.
5. Failing to Consider Future Needs
It is an error of many people to concentrate on the presently available money, and the needs of the future are ignored.
This can lead to a settlement which does not sufficiently meet their needs in the future.
How to Avoid It:
Take into account the future requirements and objectives you have in relation to your finances when coming up with a settlement.
These are the retirement benefits, education of children and the future health needs for instance.
A financial planner is someone who can guide you on the effects that your settlement will have in the future and whether it will suffice your future requirements.
6. Ineffective Communication
This means that there may be cases where there is no proper communication between the two parties, which would result in the occurrence of misunderstandings that may slow the entire process of settlement.
This often intensifies the existing disputes and makes it almost impossible to come to a common ground.
How to Avoid It:
Ensure that the you keep on communicating with the other party with the aim of reaching a settlement.
If this is not possible, you can always involve a third party who will assist in the negotiation process and conflict solving.
This paper has shown that there exists a strong correlation between effective and courteous communication and the simplification of the conflict resolution process.
7. Ignoring Legal Advice
Not seeking or even worse not following the legal advice that one is given is one of the biggest mistakes that can be made.
Instances and situations are often times mishandled or even agreements that are not in the best interest of the parties involved are made.
How to Avoid It:
It is recommended that the property settlement negotiations should be done with the help of a qualified family law attorney.
A lawyer can advise you of your legal position, assist in bargaining for better conditions and make sure that everything is done within the law.
8. Procrastination
There is also the factor of time which plays a crucial role in the settlement process while delaying the process results to more emotional and financial pressure.
Procrastination is also likely to result in signing an agreement in vain and in a hurry hence being unfair.
How to Avoid It:
As much as possible, stick to the schedule that has been set and make sure that all activities are well timed.
Ensure that you put some timed check points for each step of the process and strive to meet the set time.
Prevention is better than cure therefore one has to ensure to avoid all the possible delays that may be a barrier to timely disposal of the matter.
Conclusion
It is therefore advisable that you seek the services of a lawyer and that you avoid the following mistakes when dealing with property settlement.
Area of documentation, professional valuation services, proper communication, and legal advice are some of the essentials that can help make a property settlement process a success.
In order to avoid problems and reach the best possible outcome for all, you should prepare for the process and have a plan.
Comments