Financial Consequences of Divorce
Getting married means planning a life together with someone, which usually means that you and your partner combine your assets and debts. When your marriage ends, you need to figure out how to separate those things. If you’ve been married for decades, your assets might have been combined most of your adult life. By the time your divorce is complete, you won’t be legally tied to your former spouse any longer, but you’ll need to go through a complicated legal process first.
Why Separating Finances is So Challenging
When you’re married, your combined incomes go to supporting a single household. When you get divorced, that same amount of money needs to support two households. That can be complicated, especially if one of the spouses stayed at home during the marriage. The stay-at-home spouse can be entitled to some of the working spouse’s retirement account, or alimony, or both.
Assets that were gained during the marriage, such as investments, are considered joint property. Sometimes they can be split evenly. Sometimes one person will buy out the other. Sometimes each will keep the assets that are most important to them, such as one keeping the primary home and the other taking a vacation home.
Debts also need to be separated equally. Debt acquired during marriage is usually considered joint, even if it was just for the benefit of one spouse, such as a student loan. Debt acquired before the marriage can also be considered joint.
The separation of finances can be very complicated, which is why you need a great lawyer on your side to make sure that you get the best deal possible.
Almost always, both partners will experience a lower quality of life after a divorce, because the same amount of money has to support rent or a mortgage on two homes going forward. You might need to move into a smaller place than you’ve been used to before, or drive a less expensive car.
If you have shared children, that might also impact your finances. Usually, the noncustodial parent will pay child support to the custodial parent until the child is 18. In other cases, child support includes tuition payments through college.
If you were on a shared family insurance plan, your divorce might mean that you need a new plan. A divorce is usually a qualifying event, so you’ll need to make sure that you have your insurance needs covered within the required window. A divorce could also impact retirement planning, taxes, and countless other things.
That’s why you need a great lawyer on your side. Separating assets and debts that have been acquired over the course of decades can be extremely complicated. Your divorce is probably a very difficult emotional time, but you need someone to make sure that you get a good deal in the end so that you can move forward in the best way possible. Call Merchant Law Firm today so that we can get to know your unique situation and understand what you need.