Financial Considerations & Divorce
Decisions about divorce are complex and carries with them significant emotional and practical impacts. Part of what complicates people’s decisionmaking process is the unknown. For example, it’s difficult to envision your life after divorce without an understanding of the basics of how divorce works. In this blog post, we will explore various financial considerations related to divorce to better help you understand the divorce universe so that you can more confidently make decisions. For example, we’ll discuss (1) practical issues that arise during divorce and the (2) “big ticket” financial items that must be decided in a divorce.
Financial Considerations During Divorce
There are various financial topics to consider before divorce that become relevant as soon as the divorce is filed. These are called “pendente lite” matters, which means issues while the divorce is pending.
One of the first things people wonder about is how bill payment works during divorce. Often bills continue to be paid in the same manner as they were before the divorce. However, this isn’t mandatory. It’s possible to change this by agreement or by court order.
Read: What Are the Automatic Orders During Divorce?
The house can be one of the most fraught items in a divorce. The primary family home during the divorce process has financial, emotional, and practical considerations both during and after the divorce. Concerning what happens during a divorce, one of the first decisions to make is whether you’ll both continue to live in the family home during the divorce or one spouse will move out. The automatic orders address living arrangements during divorce, but many spouses agree to an arrangement that works best for themselves and their families.
Read: The Family Home in a Connecticut Divorce
Concerns Around Extreme Spending & Hiding Assets Concerns
Sometimes, one spouse is concerned that the other will engage in excessive or irresponsible spending or hiding assets. The automatic orders prohibit this, and lawyers have other, additional tools to help avoid or address this issue.
Read: What If My Spouse Is Hiding Assets During Our Divorce?
Divorce Attorney’s Fees
How the payment of legal fees works in a Connecticut divorce is a little confusing. First, Connecticut follows the “American Rule,” which means that each party to any lawsuit — including a divorce — is responsible for their own legal fees. Though there are exceptions, what that means is you, not your spouse, will be responsible for your legal fees. This is generally the case even if the divorce is your spouse’s idea and isn’t something you want. It is also generally the case even when your spouse had an affair or engaged in other conduct that isn’t acceptable to you within a marriage.
It’s also true that, under the automatic orders, both spouses are entitled to use marital assets to fund reasonable attorneys fees. The distinction is that while marital funds can be used to pay legal fees, each spouse is ultimately responsible for their own fees. For an example of how this might shake out, let’s say that Spouse 1 borrows funds to pay their attorney’s fees, while Spouse 2 uses funds in a joint bank account. At the end of the case, the judge may order that (1) Spouse 1 is solely responsible for the debt they incurred and (2) Spouse 2’s share of the marital property is reduced by the amount they took from the joint bank account to pay their lawyers fees. Discuss with your attorney how this might work as a practical matter in your case.
Read: Who Pays Legal Fees in a Divorce?
Read: How Do Legal Fees Work?
Review: Common Misconceptions about Divorce Attorney’s Fees
Financial Matters Decided in Divorce
Divorces must address three main financial issues: property division, alimony, and child support when there are children.
Property division is typically an important topic during a divorce. If you decide to move forward with a divorce, you’ll want to understand the basics of how assets and debts may be divided. In addition, you and your spouse may well have emotional attachments to specific property — like the marital home and retirement accounts — which factor into your decisionmaking.
Read: Property Division: The Comprehensive Connecticut Guide
Not every Connecticut divorce involves alimony (also known as spousal support or maintenance.) which involves one spouse providing financial support to the other after divorce. However, familiarizing yourself with the factors considered in determining alimony can give you a basic framework to guide your discussion with your attorney.
Read: Alimony: The Comprehensive Connecticut Guide
If you have children, learning about the guidelines for determining child support also makes sense. Connecticut’s child support guidelines consider factors such as custody arrangements, income, and the children’s needs.
Read: What Is Child Support?
You have good grip on the financial considerations that arise during divorce and the major decisions made at the end. Therefore, you now have the knowledge you need to make informed choices in and about divorce.