A contentious divorce can cost each party tens of thousands of dollars. The spending rarely ends when the divorce decree gets signed, and there are costs that will carry on far after you and your spouse officially become exes.
Where will you live?
The biggest future cost following a divorce is housing. Even if a couple could comfortably afford a large and luxurious home during their marriage does not mean that one of them won’t struggle with housing costs afterwards. After all, now there are costs associated with two households, including:
- Mortgage or rent payments
- Standard upkeep and maintenance
- Utilities
- Homeowner association dues
- Sudden repairs
There are also “start-up” expenses associated with moving out from the marital home (whether one party keeps it, or the couple sells it to split the proceeds). These include:
- Security deposits
- First and last months’ rent
- Broker or realtor fees
- Purchasing furnishings and household goods
Don’t forget about your children’s needs
Child support will go a long way towards covering child-related costs. However, there are always additional expenses. You might not have thought of these because your children aren’t at the age where all of them are timely. Even if they are not necessary at the moment doesn’t mean that they won’t become an issue in the future.
Orthodontic care, for example, routinely costs thousands of dollars and insurance rarely covers it. A bill of $10,000 or more for treatment isn’t unheard of. This might not be on your radar now because of your child’s tender age, but that doesn’t mean it can be ignored.
Other oft-forgotten costs that can really add up include:
- Sports
- Extracurricular activities (like dance or theater)
- Tutoring
- Private schooling
- Driving-related expenses
- College costs
Tax consequences
Depending on how a couple structures their divorce property settlement, there might be both immediate and future tax consequences. There could be costs associated with the sale of the marital home, for example, or distributions from a retirement plan. More could come from the sale of stock, particularly if there was a significant increase in value since the time of purchase. Even a one-time cash payment counts as income for tax purposes and will have an impact.
