In these tough economic times, many couples who have emotionally separated and would like to divorce are not doing so because they feel they cannot afford it. After all, retirement savings, incomes and the value of homes has fallen sharply over the last few years while the debt burden of many families has increased.However, there are options available to people in tough financial situations who would like to afford a divorce. A team of people specializing in the financial planning aspects of divorce can help you plan for the financial impacts of a divorce. All that is needed to afford the divorce you need is some planning and some cooperation with your spouse and divorce specialists. Here are some common considerations for many families going through divorce.
Understanding the financial situation of your family is very important. The family home should be appraised and all assets and debts should be totaled up. If you suspect your spouse is concealing assets, experienced divorce attorneys team up with a forensic accountant to find hidden assets.
Getting sound legal advice is important. In addition, tax and financial advice will help you determine the best way to structure alimony payments, dividing the equity in the marital home and dividing retirement account distributions. Divorce attorneys often work together with financial planners and accountants who specialize in divorce.
Consider selling the house. It is often the case that one spouse would like to keep the family home, especially if children are involved. In many cases, one spouse alone would not be able to afford the upkeep on the home. Although the marital home was affordable on two incomes, it may quickly become unaffordable on only one spouse's income.
Planning for college tuition should not be overlooked. Many children of divorce have more difficulty affording college education and studies have shown divorced parents, on average, contribute less to their children's college tuition than couples who stay together. This is because divorced parents often overlook a college education when breaking up.
Additionally, consider collaborative divorce and mediation. Many of the best divorce settlements come in cases that do not involve a judge. Collaborative divorce is a non-adversarial process. Unlike a court case, which has defined winners and losers, a collaborative divorce works to achieve the best possible results for both spouses.
Source: Reuters, "How to afford that divorce you both want," Linda Stern, 12/6/2010