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Financial Changes Caused By Divorce

Financial Changes Caused By Divorce

October 14, 2021

Divorce could affect more than you expect.

No matter how you look at it, divorce is a difficult and turbulent time. Ending a marriage can strain relationships, emotions, friendships and finances. It also involves some tough decisions and court judgments that have long-lasting financial impacts on one or both parties.

Below we’ve highlighted four common ways divorce can impact your finances and a few strategies you can use to help protect yourself from financial duress.

  1. Attorney and court costs
    Rates for divorce attorneys vary by state and practitioner but expect to pay at least $100 an hour. Besides your attorney fees, there are also fees associated with court filings, real estate appraisers, child custody evaluators and tax advisers.

  2. Increased expenses
    Both spouses suffer financially from splitting pooled income. Instead of making and using two incomes, you’re taking on the burden of paying every expense with only one income.

  3. Child support and alimony
    Even if you and your spouse divorce, you could still be responsible for paying alimony so your spouse can keep up their standard of living. In addition to paying alimony, you’ll also be responsible for helping pay for half the expenses of any shared children from the marriage.

  4. Division of assets
    Division of personal property and assets is usually one of the most hotly contested aspects of divorce. Laws that dictate the division of assets vary by state, but any asset falls into one of two categories: community or equitable property.

Division of assets doesn’t just mean the house; it’s also bank accounts, real property, vehicles and all other items of significant financial value. You could also be responsible for the mortgage, credit cards, automobile payments and other forms of debt incurred during the marriage.

There are ways you can protect yourself from the financial strain of divorce. These include signing a prenuptial agreement, maintaining separate bank accounts, and documenting all assets acquired.

Call the office today if you’d like more information about strategies you can use to help mitigate the financial effects of a divorce.

This communication is designed to provide accurate and authoritative information on the subjects covered. It is not however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought.