Many people go to court hoping they can have the same living standard after divorce that they enjoyed before it. This is only fair, they say, because they assumed the marriage would last and give them that lifestyle forever. They’ve grown used to it, and they want to maintain it after the split.
Is this possible? It is a good goal to shoot for, but it may not be realistic.
The problem is that you and your spouse are actually increasing your living expenses by splitting up. If your income stays the same, you’re both going to feel worse off than you did before — even if the split of assets is “fair” and gives each of you exactly 50 percent.
For example, maybe you make $10,000 per month. You then shell out $3,000 per month for your mortgage and another $1,000 per month for your car and car insurance. This eats up 40 percent of your monthly income, leaving you with $6,000 to pay for food, utilities, children’s needs, fun and anything else you wish to buy.
But those numbers expect that you share most of your biggest expenses. You live together and share your car. If you really want to live exactly the same after divorce, you would need $6,000 for two mortgage payments and $2,000 for two cars. That slashes your monthly income that remains to just $2,000. As you can imagine, it may be impossible to come close to paying the bills with just $1,000 each.
A lot of couples are frustrated during divorce, feeling like life has to change drastically and that it’s not fair. Keep in mind that even a fair split may lead to these drastic changes. The key is to understand what is really fair and to know all of your legal rights during the property division process.
Source: PBS, “Are you getting a fair divorce? The economist’s take,” Laurence Kotlikoff, accessed Aug. 30, 2017