What to Consider When You’re Headed for Divorce

Going through a divorce affects every part of your life. It can change where you live, how often you see your children, and how much income you have to live off of. While some of these changes are inevitable, there are things you can do to mitigate the financial losses and protect your economic future. Understanding all of the ways divorce affects your finances and learning how to develop a strategic financial plan for your life during and after the divorce process are the first steps.

Understanding Equitable Property Division

The state of Georgia takes an equitable division approach to dividing and assigning assets and debts to either party during a divorce. However, this does not mean that it will be an even 50/50 split. If the parties are able to agree on how they want to divide the assets and debts, it’s a fairly simple process. However, when there is a disagreement, the judge has to evaluate everything and make a determination on what is equitable. Potential factors that can be considered in these decisions include:

  • Whether either spouse is being awarded alimony
  • The income and/or earning potential of both parties
  • Whether one person contributed in noneconomic ways during the marriage to further the earning potential of the other (such as one spouse taking care of the children while the other completed medical school)
  • The future needs of both parties

The first step will be for both parties to fill out financial affidavits that list all assets — separate and marital — as well as debts.

Ensuring Transparency and Accuracy

It’s impossible to ensure that a divorce settlement is fair and equitable if both parties don’t have a full accounting of the finances. When you’re filling out the financial affidavits, it’s critical to be as accurate and thorough as possible. It’s common for one spouse to have been much more involved in the financial planning than the other. You may need to look up account information, see how much you have in investments, or get an appraisal for your home.

If you’re worried that a spouse may be hiding assets or being less than truthful in their disclosures, an attorney can help you uncover everything you need to know. Lawyers often hire forensic accountants to go through their clients’ financials and ensure that there aren’t any hidden assets or those that are intentionally misvalued. While this can take a bit more time, it’s worthwhile to ensure that everything is out in the open and can be covered in the property division settlement.

Protecting Investment and Retirement Accounts

Investment and retirement accounts are often some of the largest value assets a couple has other than real estate holdings. Any assets that were invested in these accounts during the term of the marriage are generally considered marital property and subject to asset division during the divorce. This is true even if only one person’s name is on the account or the money was contributed through the earnings of one person’s job.

Because not all of these assets can be liquidated immediately for division, such as a pension plan, the court has the ability to issue a Qualified Domestic Relations Order (QDRO). This enables the account to be split into two accounts — one for each party. A family law attorney can help you ensure that this is done correctly and protects the investments you’ve worked hard for.

Assessing Whether Alimony Applies

Alimony is payments made from one spouse to another after the marriage has ended. In Georgia, alimony can be either temporary or permanent. Temporary alimony is generally awarded in cases where one party needs monetary support as they adjust to post-divorce life and work on being financially independent. For example, if one spouse didn’t work during the majority of the marriage, the courts may award temporary alimony for several months or a couple of years to give them time to get back into the workforce and establish themselves.

Permanent alimony means that the alimony payments continue forever. However, there is often a clause that ends the alimony should the receiving party remarry. Georgia’s legal code does not specify any parameters for when alimony applies, and it is largely up to the judge. However, the law does stipulate that someone cannot receive alimony if the marriage ended due to their own infidelity or abandonment.

Preparing for Child Support

The divorce process automatically includes child support when the marriage resulted in children. While most people realize that child support is going to be a factor in the divorce settlement, they are often surprised at how much the child support amount is and how much it can affect their financial standing after the divorce.

The state of Georgia calculates child support obligations by combining the parents’ adjusted gross incomes (AGIs) and using the Basic Child Support Obligation Table to determine the full amount of support based on the number of children. This number is then divided according to the percentage of income either parent earns. In general, the noncustodial parent pays child support to the custodial parent.

Planning for the Future

It’s clear that divorce involves many financial aspects, and it can result in dramatic changes in your disposable income and financial standing. The best way to protect your financial future is to work with an attorney to ensure you understand all the potential factors and end up with the most equitable settlement possible.

If you have questions about how divorce could affect your bank account or want to make sure you don’t settle for less than your fair share, the team at Hecht Family Law can help. Call our office at 470-291-5342 to get started.