After a divorce, it can be difficult to adjust to any financial changes, especially if one income has to support two households. That’s an expected expense, but there are other costs that crop up after divorce that you may not have expected. And these may take you by surprise and add a lot of unwanted stress to your life.
If you’re considering divorce or are currently in the midst of one, take a look at some of the unexpected costs many people face during a divorce.
- Retirement plans: If you’ve relied on your spouse’s 401(k) plan during the course of your marriage, you may need to make some changes after your divorce. Spouses are typically allowed up to half the value of their ex’s 401(k), but they are responsible for finding their own individual plan after the divorce. Ensure that you are prepared to look for other retirement plans suitable for your new life situation.
- Insurance policies: Many insurance policies are offered in packages that include auto, life, and health. After a divorce, policies change as assets change, so premiums will likely increase when your policies are divided. Speak to your agent to find out in advance how your premiums may increase. This will also give you the opportunity to opt out and find a new insurance company that offers better rates if you are unhappy with your new premium.
- Taxes: After your divorce is finalized, you and your ex will now be taxed separately. With changes in income and tax filing status, you may find there’s a big difference in the taxes you’ll pay now versus the taxes you paid in the past. And keep in mind there are differences in taxes between who pays alimony and who receives alimony. It’s best to speak to an accountant about any tax changes so you’re prepared.
- Family memberships and other expenses: If you have family plans at a gym, pool, or club and need to change it to a single person, the fee will likely go up. Typically family memberships are cheaper than single memberships. Keep the same in mind for plans like cell phone bills.
- Extra charges. As you move through the process of divorce, you may be responsible for the expenses of the court and your lawyer. You also may have other expenses, like having an attorney rewrite your will or having a specialist calculate the value of your financial assets. It’s important to understand your financial picture and create a budget for your legal costs—and have a plan to repay them with the least amount of stress.
We understand that divorce is a difficult experience, but it’s also an opportunity to start fresh. Do yourself a favor and take the time to prepare yourself for the expenses you may incur during your divorce.
The Bethesda divorce lawyers at McCabe Russell, PA are here to support you and help you manage any unexpected expenses as you work through ending your marriage. Our family law attorneys can be trusted to help protect your best interests and those of your children. To speak with an experienced lawyer serving Montgomery County clients today, please call 443-917-3347 or fill out our contact form. We also maintain offices in Columbia, Rockville and Fulton.