The Economics of Divorce

When people consider the cost of divorce, they usually focus on the most obvious expenses involved, such as the attorney, filing, and court fees to process the divorce. But the economics of divorce go far beyond the cost of the divorce itself.

The need to split up property between parting spouses may require selling a home or other major asset. In a bad economy, these may be sold at a loss.

Hidden costs of divorce

In addition, the economies of scale the couple enjoyed while running a single household vanishes when they must establish separate households. While they paid a single mortgage or rent plus utilities, their income must now cover the overhead of two residences.

There are steps a divorcing couple can take to mitigate financial stresses during divorce. Prior to marriage, the couple can draft a prenuptial[CK1] agreement that specifies how their joint assets will be split up in divorce while they still feel good about each other and predisposed to being fair.

Understanding potential impact of divorce

Besides simplifying the divorce process, the prenup is an opportunity for the couple really to understand how their finances will be impacted should the marriage end in divorce.

Another valuable resource to employ is a Certified Divorce Planner, a financial expert who can evaluate the consequences of each decision, including income taxes, insurance, and retirement savings. Certified divorce planners increasingly have a seat at the mediation or collaborative divorce table. Child psychologists and counselors can also give insight into how the divorce and child custody could impact the health and well being of the children involved.

If you need help with your divorce or other family law matters, you should consult a knowledgeable divorce lawyer with the experience and resources needed to win an equitable divorce settlement.


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