How Divorce Can Affect Your Family Finances

Divorce is never easy. Even in the best of cases, it can still be difficult or even traumatic. At the very least, it’s going to be a financial ordeal—even in benevolent divorces. If you’re preparing for or considering a divorce, here are some factors to be aware of.

Loss of Retirement Savings

While of course the details of a given divorce will change depending on many different circumstances, it is common to have shared finances split fifty-fifty as a legal mandate. This often applies even if only one spouse works. It also can apply to shared savings and retirement. If you and your soon-to-be-ex-partner can communicate amicably, try and understand what their financial expectations will be for the proceedings. Find a dependable lawyer to walk you through it. Be careful that you don’t lose your retirement savings simply from paying legal fees and going through the divorce, since it can often be expensive.

May Force You to Sell Your House

Shared ownership of property can introduce other complications as well. It will also most likely be split fifty-fifty. You can go about this in a number of ways. The most common would be simply to sell the property, and then split the remaining profit, but this introduces complications with the task of finding new property. This option often isn’t the favorite of divorcees with children, who don’t want to have to uproot their kids from their home. In some cases, one spouse may buy out the other spouse. Again, communicate with your ex-partner and ask your lawyer for guidance.

Payments Related to Familial Obligations

Children are the biggest factor here. It also depends on how involved you or your ex-partner want to be involved in coparenting. If someone desires to be free of responsibility completely, it is likely they will be court-mandated to pay child support. Even if that is not the case, and both parents want to be involved, it’s still possible that child support or other regular payments will be mandated from the spouse who primarily works. You’re going to want to also factor in costs related to the near-future task of coparenting, such as the commute involved. Family therapy, which absolutely should be considered as a support to any children involved, will be another drop in the bucket of your costs.

Even the most painful experiences in life can be made a little easier with some awareness. A little bit of preparation goes a long way. No matter your situation, the fact of the matter is that you can financially and emotionally come out the other side intact—and in time, even thrive.

Check out this article on why you should put your assets in a trust!