Divorce is often one of the most expensive choices of a person’s life, and it is shocking that the decision to end a marriage is frequently made with seemingly little regard given to the financial consequences.

While it is true that there are people captive to the process, many times I have observed successful individuals who have thoroughly planned out their lives decide to divorce without analyzing the decision in the same manner that brought them success in the first place.

This lack of foresight can be financially devastating, and there is a good chance it will derail any plans they have made for their future and retirement.

Financial Impact Of Divorce
For the sort of people who have been very meticulous regarding the major decisions in their lives — where they went to school, the careers they chose, managing debt, saving for retirement — it is surprising to see how little prudence is often given to the decision to end their marriage.

Divorce is one of the most expensive and important decisions a person will ever make, particularly for those in longer marriages: They have more to lose in a property settlement if they have spent the majority of their wealth- and income-building years together.

The financial ramifications need to be fully understood and analyzed before they decide to file for divorce, and many times, people seem to make this decision with little concern for the goals they have been working toward for decades.

Generally speaking, divorce cuts accumulated wealth in half while simultaneously magnifying expenses by a significant margin. This often occurs at a time where it will have a huge impact on a compounding program for accumulating retirement benefits, which can completely decimate any plans conscientious people have made for their future.

While there are plenty of variables that will impact each divorce individually depending on differing laws and circumstances, some general rules will give you an idea of how a divorce will affect a client financially:

• They should go into a divorce assuming a 50/50 division of marital assets.

• Essentially any property acquired during the course of the marriage is a marital asset and subject for division. This includes traditional pensions, 401(k) plans, investment accounts, real property, bank accounts, vehicles, etc.

• Anything that was previously separate that was comingled or retitle will likely become a marital asset.

• Incomes are marital. Whatever is accumulated from either party becomes marital money, even if it is kept separate.

• Maintenance rules will vary across the country, but a general principle is the wider the disparity between incomes and the longer the marriage, the greater the probability alimony will be ordered.

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