If you believe that separation and divorce are imminent for you in 2018, you likely know a lot of the negatives to expect. I would like to spend a few minutes talking about the potential positive effects of divorce. Right now, you are probably thinking there aren’t too many positives. Let me see if I can change your mind.
- Easier budgeting and greater control over money. The end of a marriage can mean the end of fighting over money. Even though having enough money can be an issue, there will be no more struggles about what to spend money on, and you won’t have to hear or complain about reining in spending.
- Potentially better investment returns. Divorce could mean better investment returns. When both of you are making decisions about investments, there is a negotiation between the two of you. Now you can make your own decisions without those negotiations. Just you and your wealth manager.
- More college financial aid for the kids. Divorce can be difficult for children, but there is one place where they come out ahead: college financial aid. The Free Application for Federal Student Aid sometimes only requires financial information from the custodial parent rather than both parents. However, child support and alimony received from the non-custodial parent must be included on the FAFSA. You can structure creative divorce settlements to maximize college financial aid. It is complex, but it is worth it!
- Social Security perks for older divorcees. Divorced spouses with a marriage of 10 years or longer are eligible to file for Social Security spousal benefits at retirement. You get an amount totaling 50% of the other spouse’s social security benefits, or 100% of your own, whichever is higher.
- Opportunity to reset financial priorities. While spouses can become resentful of lifestyle changes necessitated by divorce, finance experts say the opportunity to rethink priorities and start fresh can be a positive. Even major adjustments, like giving up a family home, can be beneficial in the long run. Divorce is a great opportunity to create a new life plan.
- A better bottom line. Even on a lower income, and with fewer assets, divorced people can build wealth by making smarter use of their resources. The reality is not everyone’s financial situation will improve with divorce, but you might be surprised to learn that it can.
Divorce planning is the absolute key. Start by getting a great education with a highly experienced divorce attorney, who will likely also send you to a very well qualified financial planner, so that your education will empower you into the next phase of your life. One where you come first, make your own decisions, and have no one to answer to except for yourself.