Divorce can have devastating effects on a family and its finances. According to recent research, a divorced spouse would need a raise of 30% or more to keep the same standard of living.
When a spouse knows his or her rights and responsibilities, they can make financial planning and divorce a less expensive process.
The well-being of a couple’s children should be the top concern during divorce or separation. A former spouse who is required to pay support may sometimes feel the other parent is misusing the money or that the payment is too high.
Although the state calculates child support payments, most guidelines try to consider factors such as parental income, household size, and custody arrangements.
Though typically seen as a temporary way to help a disadvantaged spouse get back on their feet, spousal support calculation is very subjective, and a lawyer may suggest alternative methods of dispute resolution.
Before visiting an attorney, mediator, or arbitrator, the client should list their marital assets, including appraisals when required. Proper research can help a couple learn the values of assets such as those listed below.
Parents should calculate how much support is necessary to cover housing, food, utilities, daycare, school supplies, clothing, and extracurricular activities. A stay-at-home parent can learn the other spouse’s income potential by learning what their profession pays in terms of salary and benefits.
Divorce can have a greater financial impact on a spouse’s future than retirement planning or a home purchase. If a parent has primary custody, they should work to get what they deserve, as their financial situation will affect the children as well. It’s wise to consult a financial planner for advice before settling a divorce case.
If spouses cannot come to an agreement on the terms of a divorce, they will likely consult attorneys. However, arbitration and mediation can help in some cases, and both options are less expensive and time-consuming than taking a case to court. While divorce can be financially devastating to everyone involved, parents can protect themselves and their children by taking precautions and becoming educated.
Paul Baggetta is the Founder & Principal of Baggetta & Co. Paul Baggetta has been a Taxation Accountant for over 36 years, a Financial Planner for over 18 years and in 1993 qualified as a Real Estate Licensee, holding a Triennial Certificate (currently not trading), and operated his own Real Estate business for property investment clients for over 5 years as a second business.
Financial planning services provided by Paul Baggetta as an Authorised Representative (No. 261469) of Capstone Financial Planning Pty Ltd. ABN 24 093 733 969. Australian Financial Services License No. 223135.
Taxation & Accounting services provided by Paul Baggetta as a Registered Tax Agent (No.61487008) and is a Member of SMSF Association, IPA & NTAA.
The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
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