Between the war in Ukraine and the droughts happening world-wide, fuel and food prices have skyrocketed in recent months. The cost of living has seen a significant increase, even here in the United States, and a set amount of money buys less than it used to. Divorce is almost always tied up with personal finances, so anything that impacts financial situations so much will affect divorce too.
Money Trouble Can Lead to Marital Discord
A big reason that couples have marital discord that leads to divorce is money trouble. With their money having less buying power, couples are even more likely to argue over how to spend that money, leading to more divorces. Alternatively, with legal fees, two separate households, and possible alimony and child support considerations, getting divorced may seem expensive. Some couples may stay together despite marital problems because they feel that they can’t afford to get divorced.
Factors to Consider
If you are considering divorce during this unsettled time, there are several things you should bear in mind. Alimony, equitable distribution, and child support are all impacted by the overall economic climate.
When courts consider alimony, they look at whether one spouse has been dependent on the other spouse for financial support. The cost of childcare is going up much faster than wages, and many people are having to leave work or work less hours because their work doesn’t pay enough to cover the childcare that working would require. A spouse who doesn’t work in order to provide childcare is almost always considered a dependent spouse.
When determining alimony amount, the courts consider the estimated budget of each side. If you aren’t careful to consider the recent increases in cost of living and the increases that are likely to continue to come in the near future, you may be presenting a budget that doesn’t really reflect your needs, resulting in an award that deprives you of much needed income.
Equitable distribution seems like it shouldn’t be impacted by the cost of living – after all, aren’t you just dividing what you have at that moment? Unfortunately, it’s more complicated than that. The various values of houses, cars, and other valuables have fluctuated greatly in recent months. Be sure that all value estimates are for the correct date. Changing interest rates will also impact mortgage payments, which may make a difference in who wants or can afford to keep the family home.
Child support can also be impacted by the cost-of-living crisis. The assumed costs to raise a child are set by the state and revised regularly, but the most recent revision was in 2020. The existing numbers don’t reflect what it actually costs to care for a child in the current economic climate. This may leave parents without adequate support for their children for the time being.
Whether a divorce makes emotional or financial sense for you and your spouse is a personal decision that is based on your specific circumstances. The wider economic world can make a bigger difference to your divorce than you think. An experienced family law specialist can help you look at your unique situation and find the best option for you and your family.