A divorce does not just disrupt the relationship between the parties and any children involved. It also disrupts the financial life of all involved. Regardless of socio-economic status, a divorce in Pennsylvania typically impacts the short-term and long-term financial outlook for both parties. It is recommended that couples takes certain steps and think about certain financial decisions in order to ensure a smoother and less financially disruptive divorce.
One tip is to sit down and outline the financial reality now and what the future may look like. This can be done by writing down and reviewing credit card statements and bank statements from the past year. This will help outline what each party can afford and what to expect in the future. Including future expenses, such as insurance costs and child expenses like braces, is also recommended.
Alimony may be an anticipated and dreaded part of a divorce. Alimony can greatly affect the lifestyle and day to day finances of both the payer and payee. Before counting on a certain amount and expecting that amount for a specified period of time, it is vital to understand the tax implications of alimony and what will happen as life circumstances change. Alimony is typically taxable for the person who receives it and tax deductible for the person who pays it.
While divorce may be a hugely emotional and overwhelming time, it is also a financial matter. Pennsylvania couples may need to sit down together during the process and assess where they stand presently and how each party will fare separately. The facts about support, property division and expenses during a divorce and afterwards ought to be addressed and understood so each party can strive for an equitable outcome.
Source: entrepreneur.com, “5 Essential Tips for Financial Planning After Divorce“, Andrea Murad, July 10, 2015
Resource Link: Bankrate.com