How will the financial side of divorce affect you?
July 21, 2008 12:36 pm Divorce and Finance
Author of Money and Divorce, Patricia Stallworth, has studied divorce in detail, she has worked with attorneys, divorce support groups, divorcees and she has gone through a divorce herself. She has a wealth of knowledge on divorce especially in financial planning. This is all available to you in her book Money & Divorce.
We know that divorce is very emotional and there is a lot of red tape to go through, but do you think about how the financial side will affect you, if you are mega wealthy or if you do not have much money, whatever decision you make can have a major effect on your future. It’s very important to have a clear understanding of the financial side of divorce.
Although it is hard not to be consumed by the emotional side of divorce, it is actually a financial transaction, two people have to come to an agreement to divide their assets, as well as liabilities such as debts and settle custody issues.
We have outlined three of the most important financial areas to concentrate on:
The cost of divorce, have you really thought about how expensive this is? Forbes.com estimates that an average divorce costs roughly $15,000 and $30,000. If you use a lawyer in your divorce their fee’s can be very expensive, so make sure you use someone who has been recommended or you know will work really hard for you, remember to always get the lawyers terms in writing. Always look for ways to cut costs.
Then next step you have to think about is how much is it going to cost to live after your divorce? Don’t be fooled in thinking that your costs will go down after your divorce in some cases costs go up, you will need to calculate what you are currently spending and then work out how your costs may change after your divorce, remember you are taking one household and turning it into two. It’s important to work these figures out before your divorce is final so you are able to receive the correct support for your husband and find other remedies.
You will need to think about your assets and the true value of what you own and what you owe. If you have investments such as retirement plans that have never been taxed, or stocks that have appreciated in value. If you do not take taxes into consideration when dividing assets, could result in one spouse taking a smaller piece of the pie. It’s extremely important during divorce to take control of your finances if you don’t someone else will.
