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Planning Concerns for Divorcing Couples

Planning Concerns for Divorcing Couples

July 24, 2020

While divorce is certainly a time of emotional turmoil, it's a time of financial burden as well. The change brought about by divorce can be particularly devastating to families with children and to older couples who have assigned the career duties to one spouse and the home duties to the other.

When seeking a divorce, you should become familiar with the major topics: legal fees, marital property versus separate property, alimony, debt, retirement plans, property settlement, taxation, and child custody and support. You should also consider who will be responsible for insurance coverage and the impact on Social Security.

By becoming knowledgeable about these areas, you can provide your attorney with an accurate outline of your wishes regarding the settlement, and you will be able to make an informed decision before signing your divorce agreement. If you hire an attorney, you should note that they typically charge hourly rates and require you to submit retainers up front.


If you're a financially dependent spouse, it's possible for a court to award sufficient legal fees and costs to enable you to retain counsel. Assets are divided in accordance with state law, so the results depend on if you live in a community property state or an equitable division state. Within these two categories, property may be classified as either separate property or marital property, but these definitions will vary depending on your state. It’s important for you to know how your state classifies property. For example, one state may mandate that separate property consist of gifts, inheritances, and property owned prior to the marriage, and the items will not be divided. Another state may rule that all property owned by the couple is marital property, subject to division at divorce.


Child custody is based on a number of factors. Most judges place high importance on the best interests of the children. Custody may be classified as physical or legal and can be awarded to one or both parents. Individual states have child support guidelines for determining the amount of child support to be paid.

Alimony is different from child support and typically is open ended.  Alimony is based on one party's need and the other's ability to pay. Alimony is now taxable to the recipient starting Jan 1, 2019.


While divorce is difficult for all parties, not going into it with the proper knowledge of the concepts and an idea of what you would like to end up with can result in an unfavorable outcome. As a Certified Divorce Financial Analyst, we work with mediators or attorneys to create a financial plan to reflect your new reality.