Can I Afford to Divorce?
When people ask this question, they typically think about the costs of hiring an attorney. However, this is just a small portion of the total financial cost of a divorce. While we believe that no one should stay in an unhappy or unsafe marriage, we think people should be aware of the financial ramifications of a divorce. The more informed you are about both the process and what it means for your financial situation, the better equipped you are to make important decisions associated with your divorce.
Divorce issues that can have a long-term impact on your financial situation include:
- Property division
- Debt division
- Spousal support
- Child support
- Child custody
Below we take a look at each of these and explain the different ways they can affect your financial stability and future.
Property & Debt Division
Because Colorado is an equitable distribution state, property and debts are to be divided in a way deemed fair to both parties. In some cases, this may mean a 50/50 split of certain assets and liabilities, while in others, it may not. It also gives some leeway for couples to negotiate their own agreements between themselves.* Property and debt division may also be influenced by existing prenuptial and marital agreements.
No matter what property and debt division settlement a couple end up with, you will always be in a situation where your net worth has been dramatically reduced. Every shared marital asset must be divided equitably in some way, whether that be a true division or with one party taking on more debt to retain an asset in its entirety.
From bank accounts to pensions, the division of your property will likely have a significant impact on your financial future. Many people may have to adjust their expectations for retirement or move to a different, less expensive home or area.
*Note: even when a couple comes to a property division agreement on their own, it must still be filed with and approved by the courts.
Spousal Support & Child Support
Spousal support and child support orders are legally binding. If someone is ordered by the courts to pay support to their former spouse or co-parent, they must do so or risk being in contempt of court. Support payments are representative of the financial support that the former spouse or co-parent would have received had they remained married. However, making specific payments may be more difficult to manage financially than when you were simply contributing to a shared household.
Furthermore, two separate households are significantly more expensive to run than a single combined household, even when one spouse or parent wasn’t working outside the home. This fact can put further strain on the party ordered to pay support.
Just as with the drastic reduction of your net worth, paying a portion of your paycheck in support payments is a major financial adjustment. As such, you may find that you have to adjust your lifestyle to accommodate this change.
Child Custody
Custody does not always immediately come to mind when people consider the financial impact of divorce. If you are the custodial parent or are awarded primary physical custody, you may receive child support from the non-custodial parent. However, you may find that you have increased expenses across the board. Running a household as a single parent can be expensive, and while child support goes a long way in helping make up the difference, you may still feel a financial strain.
Get Help from an Attorney
Divorce is never easy, but it can be less overwhelming if you go into the process with a clear sense of what to expect. If you are considering divorce, we recommend speaking with an experienced attorney, like ours, at the Law Office of Alexandra White, P.C. Our attorneys have extensive experience helping clients through the divorce process. We can use this experience to help you understand what divorce might mean for you. We can also help you determine if speaking with a financial advisor or working with other financial professionals during your divorce would benefit your situation.
To schedule a consultation, send us a message online.