Going through a divorce can be an expensive process. A report from Fidelity Investments shows that it usually takes about five years for a person to recover from this financial blow. Pennsylvania residents may be interested in some preventative measures they can take to protect their finances in case of divorce.
For some Pennsylvania residents, the new year might mean a new relationship status from married to divorced as divorce filings increase at the beginning of the new year. While the overall divorce rate dropped by 8% from 2007 to 2017, the trend of increased divorce filings in January has continued. The increase is marked enough that January is unofficially known as "divorce month."
Divorce is one of the most stressful events that a person can go through in life, and it is becoming more common for people over the age of 50. When people in Pennsylvania get divorced later in life, they are more likely to have financial investments that need to be divided and accounted for before, during and after the process is complete. Among the tasks that should be accomplished are updating beneficiaries, gaining access to accounts, dividing investments and splitting retirement accounts.
Most people are interested in ways that they can save money, but not everyone is interested in putting their marriage on the line to do so. However, the so-called 'marriage penalty" has some high-earning Pennsylvania couples talking about using a strategic divorce in order to save money on their taxes. The Tax Cuts and Jobs Act subjects high-earning couples to a higher tax liability when they file taxes jointly.
Pennsylvanians who are getting a divorce will need to consider many factors. In particular, property division can be significantly complex. One issue that is rife for dispute is splitting the marital home. If the parties are agreeable to a negotiation, a buyout is a viable strategy to avoid a long-term battle over ownership.
The financial aftermath of divorce sometimes leaves people in Pennsylvania struggling to pay bills. Even people with relatively high salaries often go through an adjustment period when shifting from a two-income to a single-income household. A divorce might add new expenses, like spousal or child support, as well. Regardless of their income level, many people have to overhaul their budgets after a divorce. A proactive approach helps to mitigate these financial challenges. Post-divorce budgets should focus on meeting monthly expenses, attacking debt, and building an emergency fund.
Pennsylvania residents may be familiar with the gender stereotype of a greedy husband hiding away money to prevent his soon-to-be ex-wife from getting her hands on any of it. This outdated assumption is inaccurate and can be potentially disastrous for husbands going through the divorce process who are interested in a fair divorce settlement.
Many Pennsylvania couples are finding that getting divorced after 50 can be extremely tough when it comes to their health. While health professionals are finding that divorce can lead to some adverse health issues, it can be particularly harder for those over the age of 50, who may already have underlying or existing medical problems.
In the past, asking a significant other to sign a prenuptial agreement in Pennsylvania was often looked down upon. However, as more and more people are waiting to get married, the stigma surrounding prenuptial agreements has begun to dissipate. This is particularly true for people who started businesses before tying the knot.
Married couples in Pennsylvania who have student loan debt may at a higher risk of getting divorced. The average student loan balance has increased 62% over the past decade to $34,000. Furthermore, the number of people who owe more than $50,000 in student loan debts has also increased significantly.