According to the CDC the annual divorce rate is around 3.6% for every 1,000 population. If your marriage is on the rocks, one of your many worries is probably the impact divorce will have on your financial life. Sifting through the realities and myths of the financial impact of divorce can be daunting. The following are the three widespread myths of the financial impact of divorce.
My Money Is My Money, and Your Money Is Your Money
Some people believe that if they keep the money they earn in separately titled bank accounts, it is “their money”, but this may or may not be true
Whether your money is “your” money in the context of divorce depends on state law, how the money was earned, whether it was inherited and whether you live in a community property state or not.
To obtain accurate predictions, rely only on information provided by an attorney or certified financial divorce analyst licensed in your state of residence.
After the Divorce, Both Parties Will Enjoy the Same Standard of Living
When there are plenty of assets to go around, both parties are able to enjoy the same or similar standard of living they did before the divorce. However, many American families do not own adequate assets to allow this to happen. Therefore, although many states include the “standard of living” as a factor to be considered in spousal and child support, the economic realities are that it costs more to support two households than it does to support one. As such, it is often the case where neither party enjoys the same standard of living after a divorce.
A Nonworking Spouse Will Get Alimony for Life
While it is usually true that nonworking spouses will receive some amount of alimony, the time period is often limited to that necessary to allow the person to get back on his or her feet. This type of alimony, usually known as spousal support, is defined by the laws of the state in which the divorce occurs.
Unless the marriage was very long and one of the spouses is not working, it is unlikely that permanent spousal support will be awarded. Usually, a judge will award temporary or transitional alimony to allow a nonworking spouse to obtain a job or an education with which he or she can become self-supporting. In short, spousal support cannot be relied upon forever.
This article is a service of Wheatley Pritchard & Associates PLLC, Personal Family Lawyer,® who develops trusting relationships with families for life. If you need to prepare for the financial impact of a divorce, it is wise to consult with an experienced lawyer who is trained to provide you with accurate information about the laws in your state. Contact us today to schedule an appointment to discuss your future and we’ll identify together how to best prepare for you and your family.