Divorce is a significant change in a person’s life, and one area in which many women are profoundly affected is their financial wellbeing. Transitioning from shared financial responsibilities to managing solo can be challenging and overwhelming. There are many ways in which divorce can affect a woman’s financial stability. Here is a look at the most common issues that women may encounter and strategies for overcoming them.
Division of assets
One of the first financial hurdles that must be overcome in a divorce is dividing assets. This includes the family home, any other property or assets of value, investments, savings, and business interests. This process can often leave women feeling vulnerable, particularly if they were not actively involved in managing the family’s finances while married.
In the state of Colorado, the division of assets must be conducted fairly. If the divorcing couple is unable to agree on how their assets should be split, they can seek support from a trained mediator or, in exceptional circumstances, ask for court input. In this case, the court will consider the economic circumstances of each party and the value of the property that is to be distributed, along with the right of the party who will maintain physical custody of any children to remain in the family home [1].
By taking into account all assets and the individual circumstances of the divorcing couple, it is usually possible to reach a fair and equitable outcome that does not unfairly disadvantage either party.
Alimony
Alimony, often known as spousal support, is usually awarded in situations where there will be a significant financial disparity between the parties after the divorce. This is often the case when the woman has stayed at home to raise children while her husband was the primary earner.
The amount of alimony that is awarded is calculated based on a number of factors, including the length of the marriage, the financial contributions of each party, and the standard of living to which each party has become accustomed. The higher-earning spouse is usually required to pay alimony for up to 50% of the duration of the marriage, allowing the lower-earning spouse to transition to financial independence before the end of the alimony term.
Income disparities
In cases where a woman relied on her spouse for financial support while married, she may struggle to cope with the financial disparity that she faces once divorced, even after a fair and equitable division of assets and the receipt of alimony payments.
It is recommended that divorcees evaluate their career and personal development options in order to pursue any education or training that is needed to achieve financial security. If this is not possible due to caring responsibilities, they should ensure that their ex-spouse pays appropriate child support to prevent them from being unable to afford basic necessities.
Being the primary carer for children often results in increased expenditures in areas of childcare, education and healthcare. Women who are struggling financially can seek advice and guidance from the Colorado Department of Human Services [2], who can support them in securing the child support payments to which they are entitled.
Health insurance
Many women benefit from free health insurance as part of their husband’s policy while married. Once divorced, this cover ends and alternative arrangements must be made. It is recommended that women and children have all of the medical and dental checkups to which they are entitled while they are still covered by the husband’s insurance policy and seek alternative cover to begin as soon as the divorce is finalized.
Often, children will continue to be covered under their father’s insurance policy after divorce, which will limit the increased cost of medical care. It is essential that all policies are checked to mitigate unexpected financial burdens resulting from unforeseen medical expenses after divorce.
Debt repayments
Assets acquired during a marriage are split during divorce, and this is also true of shared debts. These can become a significant burden for women after divorce. Therefore, in cases where a divorcing couple has outstanding debts, they must both understand their individual financial liabilities and work together with financial professionals to agree on a realistic repayment plan post-divorce.
Compromised financial decisions
Stress and anxiety related to divorce can impact a woman’s ability to make sound financial decisions, so it is essential that women seek professional advice to help them navigate the complexities of divorce and make financial decisions with a clear and well-informed mindset.
In conclusion, women will face a number of financial challenges in transitioning to single life after divorce. By taking proactive measures to plan for this reality, seeking appropriate guidance from financial and legal professionals and pursuing career development opportunities, they will be able to safeguard their financial security and that of their children.
At Lewis & Matthews, P.C., we can empower women to overcome the financial challenges of divorce and emerge in a financially and emotionally stable position to pursue a secure and fulfilling future.
Resources:
[1] https://www.divorcenet.com/resources/divorce/marital-property-division/colorado-divorce-dividing-prop
[2] https://childsupport.state.co.us/
