How Will Divorce Impact Me Financially?

 Posted on May 19, 2023 in Family Law

 Divorce not only has a significant emotional impact, but it can also carry a substantial financial burden. The financial impact of divorce can be far-reaching and affect various aspects of your life, including income, assets, debts, and future financial stability. Being aware of what some of these areas are can help you better prepare and avoid some of these issues.

Division of Assets and Debts

One of the most immediate and tangible financial consequences of divorce is the division of assets and debts. Texas is a community property state, so marital property, such as the family home, investments, and other assets, may need to be divided between the spouses in order to achieve that 50/50 split. This process can be complex and often involves negotiation. If a couple cannot reach an agreement via negotiation, then the court will make the decision for them. The process can result in the need to sell assets or divide them in a way that may not be financially advantageous for one or both parties.

Household Expenses

Divorce can also lead to a significant reduction in household income. You may not be going from a two-income household to a one-income household. This can be particularly challenging for individuals who were financially dependent on their ex-spouse or who may have sacrificed their career or earning potential during the marriage. Adjusting to a single income can require significant lifestyle changes and budgetary adjustments. In some situations, the court may order spousal support for the lesser-earning spouse, depending on the circumstances and the history of the marriage.

If you are the spouse ordered to pay spousal support, this can also cause a financial burden on your budget.

Child Support

If a couple has children, the court will often order one parent to pay the other parent child support. This is contingent on what the final custody order is. In some cases, such as shared custody, the court may not order support since both parents will have equal parenting time with the child.

Child support payments can add an additional financial strain on the paying parent, impacting their ability to meet other financial obligations or save for the future.

Retirement Accounts

Divorce can also have implications for retirement savings and investments. In many cases, retirement assets accumulated during the marriage are subject to division. This can result in a reduction of retirement savings for both spouses, affecting their long-term financial security. It may also require adjustments to retirement plans and strategies to ensure an adequate retirement income.

Contact a Llano County Divorce Lawyer

While divorce can have a substantial financial impact, it is important to remember that with careful planning and adjustment, it is possible to rebuild your financial future. Developing a realistic budget, exploring new income opportunities, and seeking financial advice can all contribute to recovering from the financial setbacks of divorce and working toward long-term financial stability.

Another critical step to successful financial rebuilding after divorce is having a skilled Llano, TX divorce attorney advocating for you during this process and ensuring your rights to the marital estate is protected. Call Law Office of Russ Alan Baker, PLLC at 325-216-2006 to schedule a confidential consultation and find out how we can help.

Source:

https://www.thebalancemoney.com/a-guide-to-the-most-common-financial-issues-of-divorce-1289262