Divorce typically has multiple financial side effects

On behalf of The Walters Law Group, Ltd. posted in Divorce on Thursday, March 28, 2013.

According to financial advisors, many individuals who get divorced fail to understand how much of a long-term impact the process can have on their financial status. Divorces may directly change the lives of many Chicago families and their assets, but they also affect their incomes and taxes later on. After people divorce, they return to single tax filing status, which usually represents a higher income tax rate. In modern times, such changes may affect men and women equally.

Child care costs are familiar to most, but they may increase after a marital split. When a parent is awarded sole custody, they may have to pay for sudden expenses out-of-pocket without financial help, even though they’re receiving child support payments. Old-age costs can also rise because retirement accounts and assets are often divided. Insurance and personal health care costs may experience similar increases. Without a spouse to help pay for these fees, some people find that they rise dramatically.

Other ongoing expenses include legal assistance costs, which heavily depend on one’s choice of attorney or mediator. Improper legal planning, however, can lead to drawn-out divorce cases and larger financial burdens. In addition, the previously mentioned costs can also be exacerbated by the fact that those who don’t plan for them usually end up paying more.

Because divorce cases could have complicated financial ramifications, many people seek legal counsel prior to beginning their divorce proceedings. It’s important to plan for things like future expenses and understand how the coming division of assets will affect both parties. Working with a family law attorney could help clarify one’s future financial burdens and drastically reduce their overall effect.

Source: Forbes, “5 ways divorce takes your money,” Kenneth Rapoza, March 12, 2013