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Divorce can change your budget

On Behalf of | Jan 28, 2022 | Divorce

Like most spouses in Kansas, you no doubt became accustomed to having two incomes in your household during marriage, or, at least, having two adults to handle financial issues, even if only one was a breadwinner. Perhaps you’re getting ready for some big changes in your life. When you filed for divorce, you understood that it would have an impact on finances, especially concerning your children.

However, understanding that there will be an impact and knowing how to protect your interests and adapt to a new lifestyle are separate issues. There’s not much you can do about the first part but plenty you can do to be prepared for the latter.

Establish a legal separation date

If you make your separation from your spouse legally binding, it enables separate maintenance of your finances. This means that the court may consider any income you earn between the date of separation and final divorce decree separately owned property, not subject to property division proceedings.

A separation agreement allows you to acquire property or create contracts as though you are unmarried, although you are, in fact, still legally married until the court finalizes your divorce. Keep in mind that a separation agreement also applies to any debt incurred during the interim between separation date and divorce decree.

Consider closing your jointly owned accounts

You might not want to think the worst of your soon-to-be ex regarding his or her potential to rack up a high balance on your jointly owned credit card account before your divorce is final, but things like this happen all the time. If your name is still on the account, then you are still legally responsible for the debt, although the judge overseeing your case may divide the total amount proportionally between the two of you.

Even if there is a balance on your jointly owned account, you can close the account before finalizing your divorce so that no new purchases may be on the account. It’s also a good idea to close any jointly own bank accounts you might have shared during marriage, especially if you think your ex might try to remove money without your knowledge.

Closing jointly owned accounts helps you to establish financial independence as you lay the groundwork for a post-divorce lifestyle.

Beware of potential tax burdens in a divorce

How you file your tax returns and how much tax you owe the U.S. government might change after your divorce. What you agree to during settlement negotiations may have a direct effect on the ultimate outcome of your post-divorce tax burdens. For instance, the assets you receive, such as the house you shared during marriage or certain retirement benefits, will affect the amount of taxes you owe.

Extenuating issues that have financial implications in a divorce

As you file for a divorce and think about the future, there are many issues that may be pertinent to finances. For example, your children might go to college some day and need financial assistance from a parent. You yourself might need to further your academic learning in order to secure employment.

Making sure you clearly understand Kansas property division guidelines and making informed decisions can help ensure that you receive a fair settlement and will be able to provide for yourself and your children as you move on in life after divorce.