Sunday , 21 April 2024

4 Myths About Divorce and Money, Debunked (2K Views)

Divorce happens…and, unfortunately, many who are divorcing hold certain financial misconceptionsmoney trouble

about the process… Here are four of the most important ones.

1. My spouse’s adultery will help my case

You might think that you’re entitled to more money in the divorce because your spouse was unfaithful. The truth is, adultery does not play a role in who gets more money or assets following a divorce because states today offer what is known as a no-fault divorce. As the name suggests, in this type of divorce proceeding, separating spouses do not have to prove that the other party did anything wrong to cause the breakup of the marriage.

Divorce isn’t about punishing people for bad behavior; it’s about finding a way to divide up money and assets between two people. Your spouse’s infidelity does not mean you will automatically get the house or you will receive a greater amount of alimony.

There is an exception, though: If your spouse blew a significant amount of money to pursue the affair — renting a secret apartment, spending on lavish trips — your divorce judge might require them to pay more.

2. I didn’t work during my marriage, so I’ll get alimony payments for life

If you didn’t work during your marriage, you will probably receive alimony payments but these payments might not be as permanent as you might think.

Today, nonworking spouses usually receive their alimony payments, also known as spousal support, for a limited time. The goal is to provide the spouse with some financial support until that person can find a job or pay for an education. Don’t expect an unending stream of financial support from your ex-spouse.

3. Money in my own bank account will be mine after the divorce

Don’t think that just because you stashed money in a bank account in your name only that you won’t lose some of these funds in your divorce. Your former spouse might be entitled to some of the money in this account. Whether that’s the case depends on a host of factors, including how that money was earned, whether you inherited it, or whether you live in a community property state.

That community property state part is important. There are nine of these states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Alaska is an opt-in community property state. In these states, all assets acquired during a marriage are considered community property and owned by both spouses equally. In a divorce, all assets are split 50/50.

In the rest of the states, assets in a divorce are to be divided equitably, but not always equally so, even if you’ve stowed money in a private bank account, your divorce judge might decide that you either owe your spouse half of that money or a portion of it, depending on the circumstances of your case.

4. I won’t have to worry about the debt my spouse ran up on a credit card

This is a tricky one. Depending on where you live, you usually won’t be responsible for the debts that your spouse ran up on a credit card that is in that spouse’s name only but, if you live [in] one of the community property states, you will be responsible for half of that debt, even if the credit card account was never in your name. There is an exception, though: You are only responsible for 50 percent of the debt your spouse ran up during your marriage. Any debt your spouse ran up on the credit card before your marriage is not your responsibility.

If you don’t live in a community property state, you are usually not responsible for the debt your spouse runs up on a credit card. However, there are some exceptions. If the debt your spouse ran up was to pay for your child’s dental work, to repair your home’s busted water heater, or to replace your residence’s furnace — basically, to cover any essential family expense — you will then be responsible for half of that debt.

The comments above are edited ([ ]) and abridged (…) excerpts from the original article by Dan Rafter

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