Every divorce is painful and difficult for all parties, with no exceptions.
Yet it can also be the start of a happier, more financially secure, and more emotionally fulfilling life for the soon-to-be uncoupled individuals. If they have children, of course, more attention needs to be paid to the psychological, emotional, and economic impact of the proceedings.
There are already enough cases to prove that moving on emotionally can be done, after a period of emotional healing, and forgiveness is allowed to gradually happen. After all the hurt is over, the financial obligations that come with the divorce is what will often remain.
Many ask: “How can I be sure that me and my children will be financially protected after the divorce?”
Others demand an answer to the question: “How do we start over again?”
While it cannot be realistically expected in every case, a smooth divorce happens when both parties learn to accept that it is the right decision and will benefit both of them in all aspects of their lives. This way, there is no unnecessary holding on by one or two persons for something that cannot be recovered: the husband-and-wife relationship. What they can look forward to is that, someday, they can become good friends again. Better still, they can learn faster how to collaborate and cooperate as co-parents.
A good way to restart the relationship as friends is to settle the financial welfare of both parties to the divorce. Spousal support is an inevitable issue in all divorce cases. It can take the form of a regularly provided alimony or a one-time payment as ordered by the court.
Here are some ideas on how to be wise in handling money and some strategies to secure a better financial future for both individuals after they prepare to become officially single again:
Put the House on the Market
If a couple agrees to a divorce and neither of them wants to stay in the conjugal home, they can decide to put the house on the market. If it has tax arrears, they can go and get a property tax reduction consultation that will help them generate savings that could have been lost to the IRS.
Selling the property that was once shared by the couple is often a good option because remaining in the house might prevent a faster moving-on period for the one who will stay since the property will have many shared memories of the once-happy marriage that has unfortunately ended. Both individuals might also prefer to downsize a bit as they prepare to return to single life. In some cases, one or both parties decide to move out and live closer to family so that they can have a support network post-divorce, something that is so vital especially for the kids who also need to adapt to the new set-up.
Convert the Family Home into Rental Property
Another variation is to convert the house into rental property. If both parties want to relocate and move to another house, the home can be rented out to produce rental income that can be shared by the ex-partners for a defined period so that they can gradually recover the relocation costs. Sometimes, the ex-spouse who gets full custody can be given this option so that there is steady income to support the children. Long term spousal support is necessary if the other party is unemployed or cannot leave small children to find work.
This move is also good for a rehabilitative alimony set-up where one party needs some time to become employed again. Having passive income rental goes a really long way to help people find their bearings in life and in their finances.
Divide Assets in the Stock and Other Sources of Income
If one or both parties have investments in stocks, bonds, and other financial instruments — they could consider dividing these assets to generate liquidity. For people with high net worth, they are able to unload from the market and use the total value of these instruments to pay for a one-time lump sum alimony, provided this has been agreed upon and approved by the court. In some situations, a lump sum alimony may actually be ordered by the judge. Using stocks and financial instrument holdings will, of course, be examined by the lawyer to determine if these are already divided as equal distribution or not. An asset or income that is already in equal distribution status will no longer be considered part of the income of the one charged to pay the alimony. Other sources of income that may be included in the computation of alimony payments cover partnerships, trusts, and even signing bonuses.
Divorce property distribution can be a complex matter. For that reason, all parties should seek quality legal advice.
