Money can be the source of problems in many relationships, according to a 2018 Harris Poll. It can also be the root cause of a divorce. There is, however, a flipside to that truism. A divorce may have a financial silver lining. Some of the financial benefits that may result from a divorce are:
- Divorcees have easier access to retirement funds.
- A divorcee can control and reset his or her own financial goals.
- It is easier to budget for one than for two.
- Single parents may qualify for more educational aid for their children.
- A divorce may improve a person’s bottom line.
- A divorce will likely end the bickering and stress over money. Each partner is now free to set his or her own budget priorities.
Experience A Greater Return on Investments
This is particularly true for women. During a relationship, men frequently make most of the investment decisions, which can be more aggressive and riskier than the female standard. Women tend to be more conservative in their investment approach. In a tricky financial market, the conservative strategy is frequently the best one. Following a divorce, women can take greater control over their financial strategy and hopefully come out ahead.
Greater College Financial Aid for the Kids
Divorce is never easy for children. However, following a divorce, they may have greater access to federal tuition assistance. The tuition application only requires the income of the custodial parent, not the income of both parents, which will likely be higher. Divorce does usually lower an individual parent’s income. However, the custodial parents must report child support and alimony on the application. While no children would be rooting for their parents to divorce, this issue can be an unexpected benefit.
Rethink Financial Priorities
A divorce usually necessitates a lifestyle change – and often for the worse. However, it can also mean a new financial beginning. Moving to a smaller home can save money. The newly-divorced individual has an opportunity to reset his or her financial goals to suit themselves.
Improve Your Bottom Line
A divorce invariably involves the loss of income. However, it can also be an opportunity for a person to create a revised financial plan. What was a priority during the marriage (vacation, etc.) may no longer be a necessity, and the money might be put to better use, such as investments, savings, or the pursuit of more education and greater income.
A divorce may put an individual into a lower tax bracket and reduce his or her tax payment.
Also, depending on the state, a person may or may not be responsible for his or her ex’s debts. Debts are split in community property states, but common law states provide some protection. Florida is a common law state, which means individuals are only responsible for those debts which carry their signature.
Medicaid
Serious long-term illness can quickly deplete a couple’s financial resources. Medicaid will only step in if all other assets are used up. For a married couple, this means both of their assets need to be depleted before one of them can become eligible for Medicaid benefits. Couples can find it more beneficial to divorce and place all mutual property in the name of the healthy spouse. This allows them to keep the property while also getting medical help for the sick spouse.
How Are Individual Family Members Financially Affected By Divorce?
Women:
Divorce can be harder on women than on men. Many depend on their ex-spouse for child support, and when such is not forthcoming, survival can become difficult. One-third of women lose their homes. Divorce can bring women down to the poverty-line level and the need for public assistance to support themselves and their children.
Children:
Following a divorce, many lose the full-time presence of their primary caretaker if the caretaker needs to go to work full-time. Usually, neither parent will be able to afford the usual extras, such as lessons, hobbies, vacations, etc. Also, insurance may no longer cover all medical expenses.
In most instances, there are public programs for nutritional and healthcare assistance to help children.
Men:
Men who are responsible for child support and/or alimony can experience up to 40 percent loss of income and a lower standard of living. The less these men provided toward their family income prior to the divorce, the more they will be affected after the divorce. Men who do not comply with court-ordered child support payments may have their wages garnished.
Conclusion:
Divorce is one of the easiest ways to suffer a financial setback. Women and children are the most vulnerable and may be forced to depend on government programs for survival. These programs are expensive and cost taxpayers over $112 billion annually. This does not take into account that children from a broken home are more likely to commit crimes, which is also costly to society in general.
The best thing both men and women can do is to prepare financially for an affordable post-divorce lifestyle, which, if handled properly, can be better than the lifestyle they experienced while married.
The legal process can get difficult, which is why we always recommend that you seek the assistance of counsel; or at least have a consultation. Schedule a consultation with one of our attorneys today to review the issues of your case, the legal options you may have, and certain rights that pertain to your unique situation.
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