Divorce rates have been on the decline in recent years, and several factors are contributing. Fewer couples are choosing marriage to begin with – opting instead to stay single and co-habitat. This is especially true in lower income categories. However, one age group that does find divorce rates growing are those over 50. Similar to career change – more people over 50 are getting divorced than in previous years and this change carries some big costs.
To begin with, there is the price of divorce itself. This includes everything from litigation fees, to charges for document copies, and attorney bills. Attorney fees are usually the highest price tag item. With lawyer fees averaging $250 per hour, if you can agree on property distribution and child custody details without a lawyer, saving yourself this cost will be huge! If you think you can come to an agreement out of court and save yourself the money, check out Divorcenet and their guide to DIY divorces for tips.
Be prepared ahead of time and costs will be more manageable. To start, make a list of your assets and liabilities before going to a lawyer. Both categories will need to be divided. Now is the time to open individual banking accounts and start to close off joint accounts. Make sure that you change names as appropriate on all titles, deeds, and accounts. Monitor your credit report throughout this time as well. Because debt is split, your spouse may end up paying for debt that still has links to your name on it.
Next, there is the cost of starting over to consider. Be sure to consider the price of having 2 of everything. Two residences, two sets of bills, not to mention savings accounts split in two, and two sets of insurance policies (health & home/auto). Filing income taxes separately will also result in much different returns going forward. You will need to consider if you will be paying or receiving child support or alimony money. Alimony is taxable and must be reported while child support does not.
On the bright side: many people find that the emotional freedom is worth the financial costs. Create a new budget for yourself….look at where you can cut costs and increase savings. You won’t be able to spend like you could with two incomes and one home, so you will need to list priorities in order. Experts recommend meeting with a financial consultant to help organize and make sure you considered everything.