Divorce is not conducive to building wealth. Wealth creation is exponential when couples stay together, and the downfall of a marriage can devastate couples financially for years to come. Recent studies have highlighted the financial benefits of marriage on wealth accumulation and found that divorce entails more than maintaining two households and dividing assets.

A long-term study completed by Ohio State University showed that the estimated reduction in wealth is 77%, even a decade after the divorce is final. Married couples, on the other hand, enjoy a 93% growth in wealth over this same period of time. These numbers reflect more than just the raw cost of getting a divorce and dividing assets.

As divorce rates for those in their 50’s and 60’s have nearly doubled over the last few decades. The financial fallout can leave couples with less money than anticipated during retirement. Here is a closer look at a few of the costs:

• Attorney fees are one of the hard costs in a divorce that are largely controllable. The fees for an amicable divorce, where you work everything out and have an attorney sign off, can be completed for less than $1,000. However, older couples have a lot more in the way of assets and debts, which can lead to increased conflict. The more items you are disputing, the longer the divorce will take to settle, and the higher the attorney costs will be. Negotiators are less than attorneys, but can still increase costs above the $10,000 mark. The average cost of a divorce ranges from $15,000 to $20,000, which directly reduces assets for both parties. Be prepared to compromise during this very emotional time.
• Alimony for life is a common rueality for long-term Even though child support may no longer be a factor, because the children are grown, inequity in income is often compensated in the form of alimony. Subsequent marriages without the longevity factor may only include a few years of alimony rather than a lifetime of alimony.
• Dividing household assets is not a simple process. Titles must be changed and often assets must be sold, which could lead to sales at inopportune times which do not take market conditions into consideration. Retirement accounts and pensions may include sales, withdrawals, and other proceedings with tax consequences. Long term residences may require a sale or refinancing, depending on who keeps the home. Staying in the home is likely to reduce the liquid assets you receive in the settlement. Division of assets may result in selling stocks or mutual funds when markets are down, or selling real estate when the market is flat.
• Requalifying for independent credit may be a challenge. Joint debts must be refinanced or moved to individual accounts. You may be required to secure new loans for existing debt on your income alone. To prevent the sale of assets with accompanying liens, like your home, you must be able to obtain a loan in your name only. If you are unable to refinance the home or other asset, you may be forced to sell. Obtaining an equity line of credit may be an option to “buy out” the other party. * may be a spot to say something about the non-working partner
• Beware of debt division. Creditors have signed repayment agreements established at the time the debt is taken out. Divorce courts divide assets based on state laws without consideration for these legal agreements. This conflict, regarding who is responsible for repayment, often results in a court judgment, laying out the debt responsibility that is different from the legal agreement you and your soon to be ‘ex’ have made with creditors. Begin by reviewing assets and account titles for all debt. Then move as much as possible into individual accounts to prevent your credit from being impacted by the divorce.
• Watch your credit. Declining credit is a common problem with divorce. Given that credit scores are used to determine deposits, qualify for housing, and even considered for employment, paying extra attention to your credit during this time can help you maintain your credit score at a time when you may have more credit pulls than normal.
• Assets get cut in half, leaving couples with less for retirement. You are no longer able to use combined investments, take advantage of a home that may be nearly paid for, or combine social security payments to fund your upcoming retirement. Even before the divorce is final, reduce spending and increase savings to make up for the loss of account balances.
• Increased income to maintain your standard of living. It is estimated to cost 30% more to maintain your current standard of living after a divorce. The cost of two residences, utilities, and everyday living expenses no longer benefits from economies of scale.
• Family support may have to give. Many couples with adult children find they are still providing financial support. As seniors are living longer, financial support for aging parents may also be factored into the mix. The courts do not mandate support for adults, and you may have to rethink ongoing contributions due to diminished assets. Your retirement may be at risk and ongoing support for a third party may be in jeopardy.
• Consider a prenuptial agreement. If you decide to get remarried, have a prenuptial agreement for both parties. With limited assets from the divorce, you need to protect those assets from becoming further divided. Even though a prenuptial agreement is not romantic, it is wise when parties are bringing assets into a marriage.

Marriage brings with it many joys and many challenges. You share life experiences with a partner. Studies show that when couples work together, they are able to build assets much faster than individuals or cohabiting couples. Divorce can strip those gains away quickly if you don’t tread carefully. The financial impacts of divorce are felt as early as four years before the final divorce decree.

If you are burdened with high amounts of credit card debt and are struggling to make your payments, or you’re just not seeing your balances go down, call Timberline Financial today for a FREE financial analysis.  Our team of highly skilled professionals will evaluate your current situation to see if you may qualify for one of our debt relief programs.  You don’t have to struggle with high interest credit card debt any longer.  Call (855) 250-8329 or get in touch with us by sending a message through our website here contact-us

If you are burdened with high amounts of credit card debt and are struggling to make your payments, or you’re just not seeing your balances go down, call Timberline Financial today for a free financial analysis.

Our team of highly skilled professionals will evaluate your current situation to see if you may qualify for one of our debt relief programs. You don’t have to struggle with high-interest credit card debt any longer.

Call (855) 250-8329 or get in touch with us by sending a message through our website https://timberlinefinancial.com.