The Economic Cost of Divorce
Not only is divorce an emotional decision that can have far-reaching effects on one’s psyche, but it is also a costly decision in terms of economic health as well. Indeed, getting a divorce is an expensive process, and the effect on one’s financial picture may not end once the divorce is finalized.
The Impact of a Divorce On Your Financial Health
The impact of a divorce on your financial health is the impact that you will possibly feel the greatest, as this impact will probably deliver the hardest punch to your personal wealth, assets, and bank accounts. Your financial health may become a victim of all of the following potentially financially-devastating factors:
- Lawyers’ fees. It is no secret that getting a divorce is expensive when individuals seek legal representation, with some lawyers’ flat fees ranging up to $1,500 per hour. That cost can add up quickly, especially when a divorcing pair is each working with their own lawyer.
- Court fees. In addition to lawyers’ fees, divorces are expensive even if individuals work with lawyers who charge fairly, or if they choose to represent themselves. Indeed, there is a filing fee for divorce in Virginia, as well as a multitude of fees that could be encountered throughout the process, particularly if the case goes to litigation.
- Diminished value of assets. When a couple separates, some assets will immediately lose value. For example, a couple that has $100,000 in the bank together may each be alloted half of that, meaning that an individual’s liquid assets are immediately halved. There may also be an immediate diminishment on the value of assets that could have appreciated had they been held onto long-term, such as a house which must be sold in the weeks following a divorce.
- Reduced income, more responsibilities. Another economic blow that divorcing couples must face is that of adjusting to a life where there is now only one income source instead of two. This is often coupled with the fact that each party now has more responsibilities (because the other spouse is no longer around to help out), and must handle once-shared costs on their own as well, such as rent/mortgage, utility costs, food costs, etc. Of course, some couples may also feel the economic pains of having to pay spousal maintenance on top of this.
Divorce and the Economy – What You Need to Know
Couples aren’t the only ones who are affected by divorce; divorce can slow economic growth as well, according to articles published in Investopedia and Brookings (the latter which focuses on the impact of divorce on economic opportunity). As highlighted by the data presented, divorce slows economic growth, in part because the number of total households increases. The more households there are, the more resources that are necessary to power those households, and the more adverse of an effect on the economy. The effect is so significant that Freakonomics reports that family fragmentation costs U.S. taxpayers about $1 trillion per decade, or $112 billion per year.
Studies also show that when it comes to social mobility, rates are higher amongst children who live with parents who are continuously married, as contrasted with children of divorce or “long periods of single parenthood.”
Our Lawyers Are Here to Advocate for You When You’re Seeking Divorce
The fact that getting a divorce can have negative financial implications does not mean that you should stay married; rather, it means that when seeking a divorce, you need an experienced legal professional on your side who understands the potential financial ramifications, and will work in your best interests to mitigate the worst of these. At the law offices of Buck, Toscano & Tereskerz, Ltd., our Virginia divorce lawyers have the skill set you’re looking for, and will guide you through everything you need to know about divorce, including how the divorce will affect everything from your assets to your taxes.
To schedule a consultation with our law firm today, call us at 434-977-7977. You can also send us a brief message using the form found on our website, or visit us in person at your convenience.