Divorce is often devastating, but there are a few financial silver linings.
From the cost of the lawyer to the loss of a spouse’s income, divorce often comes at a high price. What’s more, spouses may walk away from the proceedings with significantly fewer assets and retirement savings. That’s not to mention the emotional toll of the process.
“At the end of the day, divorce is terrible,” says David Hays, president of Comprehensive Financial Consultants in Bloomington, Indiana.
However, that doesn’t mean the news is all bad. While not a reason to run out and get a divorce, here’s a look at seven financial benefits that could make a sad situation seem a little better.
1. Easier budgeting and greater control over money. The end of a marriage can mean the end of fights over money. There is no more struggle over which categories get priority in the budget; no more evenings spent cajoling or pleading with a spouse to rein in spending. “On the other side of divorce is some freedom,” says Elijah Kovar, a partner with Great Waters Financial in the Richfield suburb of Minneapolis.
Nancy Hetrick, a senior financial advisor with Better Money Decisions in Phoenix, can attest to that. In the six months after her divorce to a spendthrift husband, she accumulated $20,000 in savings, thanks to her ability to set her own budgeting priorities. Meanwhile, her ex racked up tens of thousands in debt over the same period. “Typically, it’s going to be positive for one person, not the other,” she says. 2. Early access to a retirement fund, penalty-free. A divorce is one of the few times a person can pull money out of a retirement account early and not pay an early withdrawal penalty. When an agreement known as a qualified domestic relations order is reached as part of a divorce, it allows for an early withdrawal from the account. This money is exempt from the typical 10 percent penalty assessed to those younger than age 59 1/2, although income tax still needs to be paid if the money is not rolled into an IRA.
Cashing out part of a retirement account can be a risky move, but it gives the newly divorced some options they may not otherwise have. “You can really get someone in a much better cash-flow position,” Hetrick says of the smart use of that money.
Ric Edelman, founder of Edelman Financial Services, cautions people not to be too hasty about withdrawing money from an account. He notes that sometimes, in amicable divorces, people try to split the balance of a retirement fund without a qualified domestic relations order. That can be an expensive mistake. “Don’t make any decisions without the advice of an attorney and a financial planner,” he says.
Think of it as a financial decision, not an emotional one.
3. Potentially better investment returns. Divorce could mean better investment returns, at least for women, says Mela Garber, principal at accounting firm Anchin Block and Anchin in New York City. “Men usually take a more aggressive approach to investments and take more risks,” she says. Her observation is backed up by studies such as a 2017 analysis by Fidelity Investments that found women were less likely to fully invest in equities and earned marginally better gains than men. After a divorce, women have the opportunity to take over their own retirement planning, which could be a financial positive in the long run.
4. More college financial aid for the kids. Divorce can be difficult for children, but there is one place where they come out ahead: college financial aid. The Free Application for Federal Student Aid only requires financial information from the custodial parent rather than both parents. However, child support and alimony received from the non-custodial parent must be included on the FAFSA. “We’ve structured some really creative settlements to minimize the income of one parent,” Hetrick says. Additional financial aid is a little-known benefit of divorce, but one that is significant. 5. Social Security perks for older divorcees. Divorced spouses may be eligible to file for Social Security spousal benefits at retirement. You’re entitled to these benefits if you were married to your spouse for at least 10 years. “The ex doesn’t even know you’re doing it,” Edelman says. “It doesn’t have an impact on the benefits the ex will receive.”
If you were 62 by Jan. 1, 2016, you can file a restricted application for Social Security spousal benefits once you hit full retirement age. No longer allowed for younger workers, this application will allow you to receive half your spouse’s benefit while you defer your own and let it grow until age 70. For married couples, this only works if a person’s spouse has already started his or her benefit. However, for divorced spouses, the rules are different. “When divorced, you don’t have to wait until your ex turns on Social Security,” Kovar says.
6. Opportunity to reset financial priorities. While people are sometimes resentful of lifestyle changes necessitated by divorce, finance experts say the opportunity to rethink priorities and start fresh can be a positive. Even major adjustments, like giving up a family home, can be beneficial in the long run. “Sometimes it’s financially better to have a smaller house or apartment,” Garber says.
7. A better bottom line. As Hetrick discovered, divorce doesn’t have to mean a depleted bank account. Even on a lower income, divorced people can build wealth by making smart use of their resources.
The reality is not everyone’s financial situation will improve with divorce, but some people are surprised to learn that it does. “One [client] said, I don’t know why I have so much money now,” Hays says.
Modern divorce is not about who was the meanest or who slept where. It's about the money. Both spouse's income and assets are -- or should be -- on the table. But couples don't always know a lot about each other's finances, or where to look. They might not even realize how much less they're worth, due to the squeeze on incomes and the housing depression. Divorce rates fall during hard times because couples can't afford the split. But for people quitting anyway, the struggle ramps up. Here are 10 tips for getting the most out of a diminished marital pot: 1. Follow the money. If you don't know much about your spouse's finances, or aren't sure that everything is on the table, snoop. Any financial documents can be a clue to income or property: Online bank and investment accounts, life and homeowners insurance policies, payroll and retirement-plan statements, financial statements filed when you took out a mortgage, a copy of the will or trust, credit card statements, and tax returns (if you don't have copies of them, you can get joint federal returns for the past five years by filing Form 4506-T). Assuming that you know your spouse's Social Security number, you can also get his or her credit report free online, at AnnualCreditReport.com. Unexpected debts or charge accounts might show up. 2. Dig into your spouse's business. Wholly owned businesses are notorious for shielding income from the IRS or from a spouse. Tax returns might not present a full picture of what the company actually earns. If a lot of money is at stake, hire a forensic accountant -- your divorce lawyer will know one. The accountant will press for documents that show more fully where all the business assets are and how much cash is floating around. 3. Protect your flanks. You'll need personal money to tide yourself over during the months it takes to reach a settlement. If your spouse hit you with the split by surprise, he or she is probably prepared, so you're at a disadvantage. Holding some money separately makes sense in any relationship. So do separate credit cards. Freeze an open, joint home-equity line and joint credit cards immediately, so your ex-to-be won't be tempted to run up extra debt. In "good" divorces, the freeze should occur by mutual agreement. In bad divorces, one spouse could be left without credit or access to cash. 4. Nail down any money you brought to the marriage. You can normally take inheritances and any pre-marital personal savings away with you, even in a community property state, as long as it stayed in your separate name. If you mixed it into the general pot of assets acquired after the marriage, however, it will probably have to be divided when you separate, in amounts depending on state law. You might get a larger settlement if you can show that your money financed the family business or your ex's professional education. 5. Go after the pension and retirement accounts. Individual Retirement Accounts, 401(k)s, and company pensions all have to be divided, although not necessarily in half. If you each have plans, both of them are up for grabs. You can split an IRA with a written agreement, but you need a court-ordered Qualified Domestic Relations Order, or QDRO, to win part of a company plan. The QDRO should say what you'll get, when you'll get it, and how the value will be figured. The company has to approve the wording, to be sure that it follows all the plan rules. Otherwise you won't be paid, no matter what the divorce agreement says. You'll need an expert to check the value of a traditional pension. If you can get only a future payout from the plan, you might want to trade it for more cash or property now. If your spouse has stock options, an excess benefits plan, or any other type of deferred compensation, negotiate for a piece of this, too. 6. Don't expect permanent alimony. A spouse with low or no income might get alimony, but awards are often not enough to support your current standard of living and are often for a limited time period. Judges expect dependent spouses who can do so to go out and get a job Homemakers -- male or female -- sometimes think they'll do better coming into court looking "poor," says family law attorney Linda Ravdin of the Bethesda, Maryland, law firm, Pasternak & Fidis. All that does, she says, is to leave your ex free to argue that your potential earning power is, say, $80,000 -- and what does a judge know about it? You should get a better settlement if you can show that you've applied for jobs and will probably earn much less. 7. Fight for health benefits, when you don't have your own group plan.If your spouse carried the family coverage, you can usually stay in that plan, at your expense (or your ex's expense, depending on the agreement), for up to three years. Don't let these benefits (called COBRA benefits) slip away. You have to apply within 60 days of your legal separation or divorce. 8. Get tax advice right from the start, if there's a lot of money at stake.You'll want to know what any proposed settlement is worth after tax. There are lots of tricks. For example, say that the child lives with the wife, who takes the child to day care so that she can work. The husband might pay her an amount equal to the day-care cost in the form of temporary alimony. That way, he can deduct the payments on his tax return. The alimony is taxable income to the wife, but she can offset it by taking the child-care tax credit on her return. 9. Get financial planning advice right from the start. How much will you need to support yourself? Can you cover the cost of the house, if you take it as part of the settlement, or should it be sold and the proceeds divided? Is your spouse proposing to give you the risky investments while he or she keeps the safer ones? A good planner will help you think through these issues during the negotiation. One source of advice: The Institute for Divorce Financial Analysts. 10. Put $$$ in your pocket by avoiding a battle with your spouse. In hard times, divorcing couples struggle for every dime. But the more you fight, the more of those dimes vanish in lawyer's fees. If there are no children and few assets, you can usually do the divorce yourselves, even if you're only speaking by email. Otherwise, try to reach a preliminary agreement before a lawyer comes into the picture. Consider a divorce mediation professional, or a collaborative divorce where couples and their lawyers agree in advance to bargain instead of going to court. For more information, check the International Academy of Collaborative Professionals or Divorcenet.com. Divorce, unlike marriage, lasts until death you do part. It's important to get the agreement right.
Join the club. (Just be thankful you didn’t experience it right at the beginning of Dry January.) Anyway, you might be sitting on the couch crying with all of the lights in your apartment turned off. Or maybe you’re sipping champagne and painting your nails red (you do you, boo).
Either way, if you’re feeling confused, apathetic or just flat out have no idea what’s going to happen next, here’s something to feel relieved about: One thing you do have control over right now is your money. 6 Ways to Get Over a Breakup Without Going Broke Even if you shared your finances, it’s still possible to take a step back and get them under control — you just need to implement a smart plan.
Here’s how to keep your financial situation together when you feel like the rest of your life is falling apart. 1. Re-evaluate Your Budget Now that it’s just you, you’ll probably need to re-evaluate your budget as soon as possible. My ex and I split groceries and bills, so my expenses almost doubled without him.
On the other hand, if the jerk was a freeloader, congratulations — you can now spend your money on something other than a waste of space.
By re-evaluating your budget, you can cut costs you can no longer afford and still manage to stay afloat without your freshly exiled human. 2. Think Twice Before You “Treat Yo’ Self” We love the idea of treating yourself — but we don’t love how expensive it can get. If you want to indulge in something like a spa day, Michelle Hung, chartered financial analyst and founder of The Sassy Investor, recommends doing it at home. She recommends doing facials with some friends, stating face masks “can just cost a few dollars,” and also recommends doing manicures or pedicures at home or at a friend’s house. Also you don’t need to go out and buy elaborate material goods to feel better — here are a few ways to treat yo’ self for free. 3. Put Down the Credit Card After a breakup, you might want to go out and spend, spend, spend — because you deserve it, right? By all means, if you can afford it, do it — but if you have to charge it, don’t you dare! Financial coach Craig Dacy recommends figuring out what your budget allows you to spend and then going from there. “If you decide $200 is something that makes sense in your budget, go and withdraw that money and keep it in cash,” Dacy says. “By having this money in cash, it is much more difficult to accidentally overspend because it is separated from your other money. When the cash is gone, you know that you have hit your limit.” (Tip: If getting cash out of the bank is inconvenient for you, Hung recommends you purchase gift cards instead — when they run out, they run out!) Credit cards can potentially have limits of thousands of dollars, which can entice you to overspend. Try putting your credit card in your sock drawer until the initial shock of the breakup wears off and you’re back in a position to make steady financial decisions. 4. When You Feel Like Spending, Write Aside from writing down how you’re feeling about your recent life changes, you could also try writing when you feel like going out and spending money. Hung tells her clients to write when they feel like spending money, mainly because seeing the costs on paper can clarify that they may be heading into a overspend spiral. “Writing down and actually seeing the numbers is a really big wake up call,” Hung says. “It’s the same as when you look at your credit card bill, and you see everything add up — you might think, ‘Holy crap, did I really spend that much?’” Writing down what you want to purchase before you actually do it can really put it into perspective for you. You can ask yourself: Does it fit into your budget? Do you really need these things? Are there cheaper alternatives?
It’s all about awareness. 5. Spend Time with Family and Friends If you want to be around people during your healing time, make sure it’s with those who are close to you.
Your family and friends are the ones who can help you heal emotionally. In a time where you probably feel horrible, there’s nothing like sitting on the porch with your mom or going for a ride in the car with your best friend.
Talking is important during a healing process, and these are the people who want to listen to you. Not only will they support you emotionally, these are also the people who might even be willing to buy you a beer or lunch without thinking twice. It’s okay to lean on friends every once in a while for these things — just don’t become a freeloader! On the other hand, make sure you surround yourself with people who will keep you both emotionally and financially on track. “Choosing your shopping buddy may not be the best person to lean on during this time,” Dacy explains. “Find someone that understands your financial goals and will help you move on without giving you the ‘you deserve it’ pep talk in the checkout line.” 6. Sell the Stuff That Makes You Think of Your Ex If you know they’re gone for good, what’s the harm in selling things they gave you or left behind? You could profit off of last year’s anniversary gift or last week’s spontaneous purchase at the Sunday market. If you’re ready to make some extra cash off your breakup, check out these ways to sell your ex’s stuff. (Side note: Just be sure you’re emotionally ready to let go of those items — that’s more important than making money from them!) Source: https://www.thepennyhoarder.com/life/how-to-get-over-a-breakup-without-going-broke/?aff_id=2&aff_sub2=costs-of-life-after-divorce
When Sean Sutherland‘s divorce was finalized, he realized he had to toss his original plans for the future out the window. Uncertainty about starting a new life started creeping into his head. He was faced with questions about life after divorce he wasn’t sure how to answer: Will one income sustain me? Do I want to stay in an area that’s associated with memories of the relationship and people close to it?
While Sutherland, a Baltimore resident, considers himself lucky for having generous and supportive friends during his time of need, he still felt a financial burn from the startup costs of his new life.
Even though his divorce was finalized in January 2016, he still feels that burn to this day. Life After Divorce Is Costly for Everyone Sutherland isn’t alone in that he still feels the financial impact of his divorce. It’s well-known that getting a divorce is an expensive process. Between litigation fees, charges for document copies, attorney bills and more, the expenses can leave you financially drained. But the money woes don’t stop there — it’s actually where they begin. Once the papers are signed and the judge approves your divorce, your world opens up to a whole new variety of expenses. The true cost of life after divorce includes everything from establishing separate residences and obtaining new insurance policies to getting back in the dating field. Here are some examples of just how much it costs to start your life over again. You’ll Have to Find New Living Arrangements You and your ex-spouse probably shared an apartment or home, meaning you’ll be faced with finding new living arrangements. If you’re renting, chances are you’ll have to come up with some large upfront costs, such as a security deposit, and first and last month’s rent. Depending on your divorce agreement, you might not get all of your previous home’s furnishings, which means you’ll have to pay to replace those, too. Lizabeth Cole, director of public relations and communications at The Penny Hoarder, had to start nearly from scratch after her divorce was finalised. While she took small pieces of furniture from her former home, she had to replace all of her bigger furniture, along with linens, kitchenware, towels and more. On top of that, she had to pay a security deposit and first month’s rent for her new apartment. In total, she estimates she spent about $3,000 on securing and furnishing her new residence.
Depending on location and the size of the home, these costs vary widely. Rebuilding Your Savings Might Take Time For Sutherland, the 50-50 split of his savings was the biggest financial strain. He said he funded their nest egg, with the intention of the two of them living off it in the future. But he and his ex-wife agreed to split it in the divorce, which left him in a new reality. “It certainly derailed the plans I had and the vision for what my future would be,” Sutherland said. “Cutting a net worth in half is a big hit for anyone to take, let alone someone who was still pretty young and in the early stages of my career.” Sutherland lost around $15,000 when he split the savings with his ex; it’s taken him nearly two years to get within reach of where he was before the divorce. You’ll Have to Pay the Bills on Your Own It’s common for people to combine finances with their significant other.
Once you get a divorce, though, you no longer have someone to split bills with. If you’ve been doing this for dozens of years, you may find it difficult at first to adjust your spending habits. There are plenty of ways to get back on track after a breakup, though. Doing things such as re-evaluating your budget, thinking twice before making emotional purchases and preparing for financial success can help you get acclimated to only having your own money to spend. You Need Your Own Insurance Policies No longer being married means you may not have the advantage of bundled services, such as auto and health insurance. Examples of policies and services you will have to hold on your own include: Auto insurance: If you and your spouse were on the same auto insurance policy, you may have received a multicar discount. Now you will have to seek out your own plan, and it might cost more to cover your car. According to The Zebra, a single person saves about 5.6% when they get married, which equates to about $74 extra. Getting divorced increases premiums to nearly the same rate a single person pays. Health insurance: If your ex had you on their health insurance plan, you will now have to find your own coverage. Disability insurance: After getting divorced, you may owe your ex-spouse alimony or child support. You may want to purchase disability insurance so you can make the court-mandated payments should you unexpectedly experience an illness or accident that prevents you from earning money. You’re Now a Single Tax Filer Filing joint taxes when you’re married usually means you get certain benefits, like tax breaks and increased standard deductions. That means that as a single filer, you could see your income taxes increase. Don’t Forget About the Cell Phone Plans If you and your ex-spouse or significant other split a cell phone bill, you’re going to have to think about what to do next. Many cell phone plans involve contracts that are costly to terminate. However, if your divorce isn’t exactly amicable, you might want to consider canceling the plan. Erin Routzahn, senior account manager at The Penny Hoarder, shared a cell phone plan with her ex-boyfriend of two years. After they separated, they opted to terminate the plan.
The total cost to cancel it was $300, which they split. Your Mental Health — an Overlooked Cost of Divorce Caring for your mental health may not be an expense you considered part, but Elise Pettus, founder of divorce community group UNtied, thinks you should factor it in. She compares divorce process to the grieving process, saying you might be “grieving the dream of having a family.”
“I do think therapy is a good idea,” Pettus said. “One of the things I see happen again and again is how helpful it is to have a community of others who are going through the same thing.” If you’re turned off by traditional therapy due to the stigma or cost, there are outside resources available to help you. Examples include communities like UNtied or divorce recovery support groups. Some of these programs charge membership fees, and some don’t. Be sure to do your research. Good News: You’ll Probably Need to Think About the Costs of Dating Again After recovering emotionally from your divorce, you may consider dating again. While this is an exciting time in your personal recovery, keep in mind that it can be expensive. Many adults spend $150 to $250 on a single date, including dinner, drinks and transportation.
Due to the rapid expansion of dating technology, we’re going on more first dates. That being said, some leave the traditional standards of who should be paying for the first date in the dust. Some people split the bill, others go simply for the free food. The good news is, you don’t always have to go out to dinner for a date. Consider doing cheap or free activities such as bike riding or happy-hour hopping to save on costs. A New Life: Expensive at First, But Worth It The costs of starting a new life after divorce are significant, but with a new beginning comes hope. Joy Prosperity Coaching founder and business coach Joy Passey signed her divorce papers in March 2014, after 13 years of marriage. Although she had to find her own health insurance plan, she also spent money on self-care and time with her friends.
“My friends said I became more fun when I got divorced,” Passey wrote in an email. “Ha! I also started improvisational classes and started performing again. I became a better version of my former self after my divorce!” If you find yourself struggling financially while you readjust to life on your own, know that you aren’t alone. Sutherland rebuilt his savings by working as much as possible in the months following the divorce. He even took on a second job, where he worked most weekends. For him, rebuilding his savings came as a “mental victory,” and keeping busy with multiple jobs helped him move on. Sutherland offers a few words of advice to those who may feel like they aren’t able to get back on track financially: “The best advice I can give is that you will get through this: Once the immediate shock is over, do your best to replace the funds you've lost — increase your savings, decrease your spending, but do so on your own terms. Only you can know what the right pace is for cutting back or cutting loose with your spending during these tough times.” Here’s to new beginnings. Source: https://www.thepennyhoarder.com/smart-money/costs-of-life-after-divorce/
For most people, nothing in their life will be as expensive as their divorce.
Divorce is one of the most life-altering experiences to go through. It not only changes our relationship dynamics, but in most cases, it completely alters our lifestyle. No matter how hard we've worked to live the life we've dreamed of, more often than not, divorces are financially devastating. Many people lose half or more of everything they've saved over the course of their life. This includes their home, their savings, their retirement, business and other investments. If that isn't painful enough, divorcing people often see their income wither and their expenses explode. We cannot forget to factor in the outrageous expenses for attorney fees on both sides, with the higher earning partner often having to pay for half or more of the lower earning partner's fees. No doubt about it, divorce is usually bad news financially. Having said this, all is not lost. There is much we can to do improve our financial situation significantly post-divorce. 1. Try not to waste energy panicking.
Obviously, this is much easier said than done. Nonetheless, we must be diligent in making sure every ounce of our available energy is focused toward saving and rebuilding our finances wherever we can. Worry wastes the valuable time and energy we need, and it keeps our minds too jumbled to find reasonable solutions. As powerless as we may feel, we are never powerless. Where there is the will, and a little creativity, there is a way. After a divorce, we have a multitude of choices to explore, so as bad as things may seem, we will certainly not end up on the streets. We must do all we can to shift our focus onto solutions and away from problems. This mental shift puts us into a proactive mindset, which has the immediate impact of changing our mood to hopeful. 2. Take inventory. Because divorces are so twisting and confusing, it may be difficult to understand how or what is going to happen with our finances and investments. Remember that knowledge is power. We must do our research and gather the information necessary to know how to rebuild. It is helpful to create spreadsheets, making a separate sheet for our varying incomes, another for our expenses and another for assets and liabilities. On each sheet enter the type of account, who owns it, what the rate is and the contact information for each institution. As we gain more information through the divorce process, we become clear on where and how things are going to land. This gives us a better idea on the areas where we need to stay conservative, and the areas where we can afford to take some calculated risks to start rebuilding. It's astonishing how empowering it is to have one place to go when we feel stressed and need an overview of our finances. Our spreadsheets provide us exactly that. 3. Balance your budget. After a divorce it will undoubtedly take some time to adjust to the income/expense story of our new life. This isn't fun, but feeling resentful doesn't bring any less stress and nor does it bring us more freedom. We must accept what is and work with what we have. If we feel unclear on the average amount we can spend, we should be more conservative and start keeping track until things become clear. This is the most important piece of financial information we have. With it, we'll know if we need to cut back and take on a heavier load at work to increase our income, or if our situation is stable enough where we can live within the means of what we currently have and still rebuild. If we figure out that our spending exceeds our income, this situation is dire and must change immediately. We are better off knowing this information than pretending it doesn't exist and driving ourselves into an even deeper level of financial ruin. 4. Set up accounts correctly. Resetting our lives in an organized and simple way can be confusing while we're traversing a divorce. It is important to count on our legal representatives to advise us on how to take over the title of our accounts, and also who the beneficiaries on our accounts should be. This topic is especially important when it comes to dealing with retirement accounts. We must learn and familiarize ourselves with the rules on this, but we must also be mindful not to act as our own attorney. Good legal advice is key when it comes to the proper vesting and naming our beneficiaries. All these steps are what help to bring us back to a sense of normalcy, security and balance in our life. 5. Organize priorities. The realities that come with divorce include huge doses of emotional shock and disbelief. When we're divorcing it can feel as if everything is coming at us all at once, which causes us tremendous anxiety. When we are full of anxiety we start thinking in terms of dooms day. This type of thinking is highly dangerous because it leads us into emotional shutdown. If we determine that we don't have enough money to survive month to month, then first priority will need to be our budget. If need be, we must seek a financial advisor who will help us to save and grow our income. If money isn't our issue, we must turn our focus on increasing our finances, moving and creating our new life. 6. Pick your supports. Divorce separates our friends and family just as it divides the marriage. It is vital to pick the people who support us unconditionally, and who we know will have our back no matter what. Part of the pain of divorce is that we not only lose a marriage, but we also lose many of the friends that were made during the course of the marriage. If our ex is talking poorly about us to everyone we love and care for, we must do all we can to stay quiet and not fuel that fire. Those who are true to us will not believe everything they hear, and nor will they put us in a position to have to defend ourselves or our decision- making. It can also be important to get into some form of therapy, or a divorce support group, especially if we have children who have been placed in the middle. Our community of support is what keeps us resilient. 7. Learn By taking inventory, balancing our finances, organizing our priorities and establishing our supports, it helps to keep us moving forward even when we feel as if we don't have the energy. It is hard not to let the stress of a divorce kill our motivation and faith in people. However, the more proactive we are, the more we learn, reflect and take care of ourselves the healthier we are when going through the divorce and the more easily we move on after the divorce. We must put all of our energy into not letting our divorce cause us to lose direction. We must force ourselves to focus on staying on task and moving in a new and positive direction. Our happiness and continued success, at the end of the day, becomes our greatest retribution. Source: https://www.entrepreneur.com/article/307592
In TV shows and movies, the typical divorce narrative is to portray women as celebrated victims. Meanwhile, men are depicted as silent sufferers who feel resentment, anger, depression and fear over lingering financial issues, relationship turmoil and worries over breaking up their families. Off camera, the truth is that men don't always have the tools — or the support — to deal with these very real concerns. "Divorce is difficult for everyone involved, but it can be especially challenging for men who don't typically express their feelings," says David Blaylock, a LearnVest Planning Services certified financial planner™. "They want to keep their divorces private — and that's not a good policy. You want a support system in place, just like any other major life change." Sure, the old adage is true: Time heals all wounds. But good advice helps too. The more men know about what to expect when they're dissolving their marriages, the easier the process can be. So we consulted Bari Zell Weinberger, a matrimonial attorney at Weinberger Law Group, as well as Blaylock, for the key dos and don'ts of what men need to know about the financial side of divorce. 1. Do know the numbers For an average divorce, Weinberger says you should expect to pay about no less than $20,000, which includes lawyers and experts, real estate costs to divvy up shared marital property, finding a second place for you to live, as well as financial advice and therapy for you or your children. That said, the cost of a divorce can still vary — and widely. For instance, says Weinberger, the price can increase exponentially if your divorce requires niche experts, like a forensic accountant or a co-parenting counselor. Other pricey scenarios: You need to get your business evaluated (your ex is entitled to equitable distribution if you launched the business during the marriage, and even if you started your business before you were married, a spouse may be entitled to part of the increase in the business's value), you have high net worth and need a best-interest evaluation or you're facing a hotly contested custody battle with your soon-to-be ex. All of these situations could bump the price of your divorce up to the $50,000 to $100,000 range, and in some cases much more, Weinberger estimates. However, adds Weinberger, if a man comes to her office with a straightforward divorce — where all the terms have already been decided, and communication is open between the partners — then the cost could be as low as $3,500. In fact, if you have a particularly simple situation, with no minor children or unusual financial circumstances, a divorce can run less than $500, with filing fees, Blaylock adds. According to Weinberger, one other crucial element that men — and women — who are parents should think about if they're embroiled in extreme litigation: The more money you spend on your divorce, the less money you have to give your kids. "You're taking your children's [college] education savings," she says, "and you're kissing one semester goodbye." 2. Don't be too proud to pay alimony… Alimony offers monetary help to the spouse who was supported financially during the marriage — especially if one parent left the workforce to focus on the family for a long period of time. Spouses usually provide alimony in one of three different ways, depending on state laws: As a lump sum, in regular payments, or in another predetermined arrangement — say, if you cut a check to a third party to pay an ex's mortgage. (It's also important to note that alimony is separate from child support.) But the impact of alimony isn't just financial — there's also a psychological component. Men may feel that a former spouse doesn't deserve to receive "free" income based on their hard work. Weinberger notes that many of her clients are resistant to paying because no one — man or woman — wants to have to write out a check to an ex. Weinberger's advice? "While no one wants to pay alimony, if we're working out a global package, then it could make sense from a tax perspective," she explains, adding that alimony is tax-deductible. (Just be sure to file a separate tax return using a 1040 form.) 3. …And don't be too proud to collect alimony If a woman is making more than her spouse or if the father is a stay-at-home parent while the mother works, then the ex-husband could be entitled to receive alimony. According to the American Academy of Matrimonial Lawyers, 56 percent of divorce lawyers have seen an increase in mothers paying child support, and 47 percent have seen more women paying alimony, as well. But being an alimony recipient can sometimes bring about feelings of insecurity, notes Weinberger. "I have men who say, 'How is the community going to look at me?'" she says. "I tell them that they're entitled. If they're a stay-at-home dad or there is a large discrepancy in income, they should receive it." 4. Do create a post-divorce life budget When a man going through a divorce comes to David for financial planning advice, he sits him down to talk logistics. "We try to make a budget for his new life," Blaylock says. According to Blaylock, men typically think about the money that they'll have to pay upfront for divorce-related expenses — the actual divorce, child support, alimony — but forget that everyday expenses are going to change once they're newly single. For example, if you have joint custody, you'll need things like clothes and toys so your kids can live comfortably in your house. Some co-parenting experts say that many kids who split the week between moms and dads actually prefer to have all of the items they need at each house, so they don't lose anything in the transfer. 5. Do divide things equally A half-half split is easier said than done — just because you're getting divorced doesn't mean that you won't still feel tremendous attachment to your ex. Because of this, says Blaylock, many men (and women) cave to lopsided agreements — and this is often the case with men who are used to taking care of a spouse financially. "A lot of men want to continue that role, even though they no longer have that obligation," says Blaylock. "I just had a best friend go through this issue. He gave her everything, much to his financial detriment." Dividing your property — furniture, artwork, camping gear, music equipment — should be done in a way so that you don't end up with resentments or regrets. It's O.K. not to let your ex have it all. 6. Do look into alternative child support solutions Typically, child support covers basic necessities — food, clothing, shelter. Depending on how you arrange your settlement, it may also include uninsured medical expenses, educational fees, child care, transportation, travel, entertainment, college and extracurricular activities. Many arguments can erupt between ex-spouses over managing these costs. "Children are expensive," says Weinberger. And, unfortunately, all of those expenses may be tough, if not impossible, to itemize. "It's never going to work out that Dad is going to feel secure that the child support is going to be applied directly to the child," she explains. "I have so many dads who want everything identified with invoices, slips and statements. And they're not going to get them." That's why Weinberger advises her clients to come up with what she calls "hybrid" solutions. For instance, if you can pay a service provider directly, like a child-care provider, then you can avoid fighting over the money. One father I know, Weinberg recalls, even prepaid medical providers, as well as contributed to the mother's share of their 529 plan. 7. Do set up a cellular plan For children who are old enough, buy them a cell phone that's designated for the sole purpose of contacting you. Call it the "Dad Phone," and ask your ex to leave it in a spot where your child can always find it. Adding an additional line to your plan should be relatively inexpensive, though the cost will vary depending on your provider and whether or not you opt for a pricier smart phone. 8. Don't make impulsive financial decisions "Divorce is more like death than you can ever imagine," says Blaylock. "It's O.K. to be emotional. It's O.K. to be hurt. It's O.K. to grieve." This is precisely why Blaylock urges men to treat their divorces with a sense of gravity — and not make any major financial decisions for six to 12 months. Don't switch jobs. Don't move to a new city. "Hold status quo in your life," he says, "as you deal with this adjustment." Source: http://theweek.com/articles/459477/8-financial-tips-men-getting-divorce
