Divorce is never an easy thing to deal with. When two people are no longer compatible as husband and wife, they will have to go their separate ways. Eventually, the couple will end their marriage in a divorce if they can’t find a way to make things work.
Once this happens, both parties will have to deal with changes to their personal lives and their income. Each spouse’s income will usually change for better or worse once a marriage is over. Let’s look at how the outcome of a divorce will impact both party’s finances.
Courts Dividing Up Finances and Assets
When you divorce your spouse, the courts will decide to divide up your finances or assets according to what they believe is fair. Judges will carefully evaluate different aspects of your assets, property, and income to determine how these attributes should be allocated to each spouse. They will also examine the financial contributions that each partner has made to the marriage.
The couple’s former economic status and lifestyle will be considered. Courts know that at least one spouse’s financial situation is going to decline once they divorce. This is why they try to keep both parties at the same economic level if they can help it. They don’t want people to experience poverty. This is especially true if kids are involved.
Still, the court system will try to be fair as possible when they divide up the assets and income. Having tax documents, bank account statements, asset invoices, and other financial records are imperative to both parties receiving fair compensation once the divorce has ended. Courts will typically use this financial information and try not to be biased against both parties.
A Closer Look at the Property Rulings
Courts will divide up a divorced couple’s property according to state community or equitable distribution laws. What this means is that courts will decide what an even way to divvy up the property is. In many divorces, the parent with custody of the children will get the house. While the custodial parent will occupy the residence, they will also have to prove that they can afford to pay for the mortgage, taxes, utilities, and other expenses associated with property ownership and upkeep.
Keep in mind that if a spouse has a property that they purchased or used for some other reason than family, most judges will not allow you to have access to that property. This is also true for you if you own another feature as well.
Alimony and Child Support Issues
Alimony and child support are two other important factors impacting a person’s income after divorce. Sometimes a person will have to pay child support, or they might be required to make an alimony payment. In some divorce cases, a former spouse is required to pay alimony and child support. You could also be the recipient of both types of payments.
Alimony and child support will either cause your income to increase at the expense of your former spouse. These two payments can also cause it to decrease because of your former spouse. The outcome of a divorce case will determine if you or your spouse are the recipient or payee of each type of ruling. By the way, alimony payments can also be called spousal or maintenance payments.
Taxes and Divorce
Your taxes will be altered during a divorce. Typically, married couples receive better benefits than single individuals. However, once a couple gets divorced, those benefits no longer apply. You should also know that custodial parent will typically be able to claim any children from the marriage on their taxes. If a family has more three or more children, one spouse will give up a lot of money.
Also, a spouse that pays child support could provide their child more than half of the money that is needed to support them. However, that does not guarantee that they will be able to claim their children. Some parents have a tax agreement worked out where they can claim their children every other year. Other parents decide to split the taxes evenly regardless of which parent claims the kids.
Retirement Plans and Divorce
Most people don’t realize that if a spouse has a retirement plan, their former partner can claim half of that plan if they end up divorcing. Half the money from the retirement plan will go to the former spouse. Many people believe this to be an unfair rule, but if a couple remained together, they would have ended up using that money jointly.
Reducing Financial Risks Associated with Divorce
The best way that a divorcing couple can reduce their financial risk is through the process of mediation. If they can somehow work things out, compromise, and agree on how the finances should be worked out, they don’t have to suffer financially. However, most couples rarely agree on these matters.
This is why the couple who is best prepared financially usually ends up with the best outcome from this process. You should always hire an attorney to help guide you through a divorce proceeding. The attorneys at the Law Office of Michael R. Young can help you recieve a favorable outcome with your income.
Call us our San Bernardino divorce attorneys today at (909) 315-4588!