Common Financial Mistakes Spouses Make During Divorce

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In every divorce, a spouse will come into the process with a set of expectations.  Unfortunately, some of these expectations will not line up with the law or the facts, and it creates a surprise to the spouse as the case proceeds.  It can also make reaching a final settlement more challenging. Here are some of the most common mistaken expectations:

  1. I have to pay for that?  In the rush to try and claim as many assets as possible, spouses fail to realize that debt has to be divided as well.  The rule of equal distribution applies to debt as well as assets – so if you have a significant amount of marital debt, it is a mistake to think you can leave the marriage with half of the assets but none of the debt.
  2. I have to go back to work?  Some spouses have been out of the workforce, perhaps caring for the children.  In Missouri, while that spouse may qualify for maintenance, it comes with a caveat that the spouse has to pursue self-sufficiency by getting suitable employment.  The court will look to prior education and work experience and determine what it feels would be a reasonable sum to impute as income that spouse should go and earn.  It is a mistake to think that a former spouse has to support you for the rest of your life.
  3. Where is all of my support money?  Some spouses feel that they should have a high sum of maintenance to continue their lifestyle.  But that sum may be less than expected. In Missouri, a spouse has to qualify for maintenance by showing an inability to meet his or her reasonable needs through employment and property received.  If the spouse shows such a need, the court does not have to automatically give the spouse the requested maintenance – it must look to many factors, including the reasonableness of the expenses and the ability of the other spouse to pay.  With child support, Missouri goes by a chart created by the Missouri Supreme Court, and it uses the incomes of the parties to determine the presumptive child support amount. It is unlikely the court will depart from the guidelines. It is a mistake to anticipate a spouse must pay more than the law generally allows.
  4. I have to sell the house?  The marital home becomes a contentious issue in a divorce, but receiving it is not always a “win” because you have to be able to pay for it and also give the equity owed to the other spouse.  If neither spouse can really afford to keep the house, the court will order it sold and divide the equity equally.
  5. Health insurance costs how much?  When married, spouses usually have health insurance through the employer of one of the spouses.  But at divorce, the spouse no longer has to carry that insurance responsibility. If the other spouse does not have insurance through work, that spouse will have to go to the marketplace exchange and purchase a policy, which may be more expensive and less generous than the previous policy.  It is a mistake not to take this into account before reaching a settlement, particularly if pre-existing medical conditions will make for known future health expenses.
  6. Divorce costs how much?  The more litigious the divorce, the higher the cost.  Also, the court has the authority to order a spouse to pay all or part of the other spouse’s legal fees, based on a number of factors.  You should be careful to investigate these issues at the outset to avoid a shock later on in the process.

If you have other questions about divorce surprises, contact us – we can help.

 

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