When facing a divorce, some couples in Pennsylvania may expect to continue the lifestyle they led while married. However, when a marriage splits, so do the finances. People who are contemplating a divorce can take some steps beforehand to plan for their financial situation afterward.
The first step for an individual who is getting a divorce is to make an accurate assessment of his or her finances. This includes looking at how money was spent, and for whom, before the divorce. Financial planning should include the possibility of alimony, which has a monetary impact on both spouses. While the paying spouse must budget for the monthly alimony, these payments are generally deductible for income tax purposes. The receiving spouse, who will be paying taxes on alimony, should recognize that the net cash flow will be less than the amount of alimony included in the divorce settlement. A third area of concern is health insurance. If an individual is covered on his or her spouse's insurance policy, it's wise to begin searching for an affordable alternative before the divorce.
Some people may consider buying a smaller home or renting a house for a while. If children are involved, parents often want to minimize the disruption to the children's lives by maintaining the family home. However, if keeping the family home comes at too high a cost, the children will be affected negatively in other ways. Finally, some individuals will need to find a job or upgrade their current career. The costs of tuition and fees and time spent out of the workforce should be factored into the post-divorce financial plan.
Thinking about financial planning while dealing with the emotional issues surrounding a potential divorce may seem like a daunting task. A person whose marriage is ending may want to consult an attorney for advice and assistance. The attorney may be able to outline the various applicable legal issues and negotiate a financial settlement that best fits the client's post-divorce needs.