An Overview of the Financial Effects of Divorce
Divorce will affect every facet of your life, including your finances. Before you file, it is important to understand how the separation will influence your financial standing. Although your personal living expenses may decrease somewhat when you and your spouse part ways, your finances will probably need time to recover — divorce still requires you to divide one household income to support two new households.
Financial Factors to Consider During Divorce
Researchers estimate that, in the United States, the average divorce costs between $15,000 and $20,000. The cost of divorce alone will influence your finances, even before you consider additional factors such as child support. If your divorce is complex (involving contested child custody, business assets, high net worth, international issues, etc.), the cost is likely to be even higher.
Division of Property and Debts
In a divorce, you will need to divide your community property (property acquired during the marriage). This will potentially include your house, real estate, savings and retirement accounts, investments, businesses or business interests, and items of value. You will also divide your debts.
Parents are obligated to care and provide for their children. After a divorce, your children will most likely live the majority of the time with one parent (you or your ex). The court, in most cases, will require the non-custodial parent to pay child support. Your income, your spouse’s income, your standard of living, and your child’s financial needs will determine the amount of child support you receive or pay.
Once finalized, child support settlements can be difficult to change. Without the help of an attorney, you could face an unfair or unreasonable support agreement.
In some households, one spouse is the primary wage earner. After a divorce, the court can obligate this spouse to pay alimony (called “spousal support”). The court calculates alimony much like child support; your income, your spouse’s income, your standard of living and financial needs determine how much you will pay or receive.
Retirement Accounts and Pensions
Washington is a community property state. This means your retirement account or pension may be subject to division, even if it is under your name. This can be quite complex. The assistance of a seasoned legal professional can help you understand the specific implications of your divorce, how it will affect your retirement, and how you can protect your financial future.
Do you need a Washington divorce attorney? We invite you to speak with a representative from McKinley Irvin to schedule a consultation.