Divorce Analysis Blog

Advanced Ideas About Divorce and Money

Divorce realities #1: Divorce lowers standards of living

Over the next few days and weeks, I will post some “divorce realities”.  These are simple facts that I have learned from working in many high net worth divorce cases.  While they are simple and short, they are powerful in that they apply to most situations.
Divorce Reality #1:  Your standard of living will, most likely, drop, the only question is: how much?

Married couples share costs for big items such as rent/mortgage, cars, even cable TV. There are also intangibles such as child care time or time spent cleaning the house. Once couples separate, each party will need to pay for these necessities separately, ie on their own. In the absence of more income, these costs will comprise a larger slice of each person’s income.

Consequently after a divorce, one should plan for higher costs, and, if living on half (or less) of the previous income, should consider budget cutting measures. Others do well with increasing their earnings by retraining or re-educating themselves.

Some people derive hope from laws saying that divorcees have a “right” to live at their prior standard of living. In fact these laws are themselves divorced from the economic reality that this “right” is impossible for both parties to make into “reality”. The true “reality” is in fact, exactly the opposite.

March 15, 2011 Posted by | Alimony, California Divorce, Child Support Calculation, Community Property, divorce, Uncategorized | Leave a comment