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How can getting divorced impact one financially?

Many people in Rhode Island going through a divorce may be so wrapped up in the emotional side of the process, they do not focus on the financial effect that getting a divorce will have on their lives. In fact, getting a divorce can cost a person more than they may realize. However, there are ways a person can mitigate the financial impact of a divorce.

First of all it can help to retain a professional, such as an attorney or financial planner, as soon as possible. This is especially important if a person's standard of living will go down after a divorce. Any professionals hired should not have been those that the couple shared while married, to avoid a conflict of interests.

Property division is one aspect of divorce that can have serious financial implications. For example, each party may want to keep the family home, particularly if they have children. However, it takes money to upkeep a home, in addition to paying the mortgage and property taxes. Moreover, there is no guarantee the home will have increased in value when a party wants to sell it down the road.

Another financial consideration to keep in mind is support payments. Child support and spousal support often play a major role in a divorce. Obtaining these payments can be essential to the party awarded custody of their children or the party that is at a financial disadvantage following a divorce, particularly if they earn significantly less than the other party or if they have been out of the workforce for a long time. It can also help to obtain a life insurance policy to buttress those payments, if the paying party passes away before the receiving party.

Finally, it is important for both parties to a divorce to recognize that their lifestyle will likely change following the divorce. After all, the parties may be going from a two-income household to a one-income household. This makes budgeting very important.

In the end, while it may be difficult, people going through a divorce have to set their emotions aside and focus on the financial practicalities of divorce. By doing so, it can not only help them when it comes to making decisions about property division, child support and spousal support, but it can also help them plan for how their life will change post-divorce.

Source: CNBC, "Headed for divorce court? Here are your top 5 financial musts," Andrew Osterland, Dec. 22, 2016

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