There’s no doubt that divorce impacts the financial lives of both spouses in a big way. Whereas the couple once pooled their money together to meet household and child-rearing expenses, they must now support two households on the same income. According to a recent report from the United States Census Bureau, the divorce rate in Kentucky and southern states in general is significantly higher than the rest of the country. The current rate in our state is 13.5 per 1,000 for men and 16.2 per 1,000 for women. This compares to a national average of 9.2 and 9.7, respectively.
The report from the U.S. Census Bureau also highlights the following troubling facts about the financial impact of divorce on couples and families:
- 28 percent of children living with a recently divorced parent live in poverty
- Women who divorced in the past year are more likely to apply for public assistance than men at a rate of 23 percent to 15 percent
- 27 percent of women who divorced in the past year reported a total household income of $25,000 or less compared to 17 percent of men
- Children living with a divorced parent, which is the mother approximately 75 percent of the time, are more likely to live in rental housing or in a multi-generational family situation
- Three of every four parents with primary custody do not receive the full amount of child support due them from the other parent
Costs Involved with Obtaining a Divorce
The statistics quoted above refer to the standard of living of the former couple and their children after divorce. It’s also important to understand the financial implications of the divorce process itself. According to an article posted on the website Legal Zoom, the cost of the typical non-contested divorce is $15,000. When issues become contentious, the cost can easily rise to $50,000 or more. The best way to protect your assets and interests in the latter case is to hire an attorney.
Division of Assets and Debt
Kentucky is not a community property state when it comes to the division of assets in a divorce. Instead, judges divide the couple’s marital assets based on the principal of equitable division. This means that you and your spouse won’t necessarily split the item or the value of an item 50/50. With equitable division, the judge attempts to divide assets using the following criteria:
- Number of years the couple was married
- Individual contributions to the asset, which includes either spouse’s care of the home and children while the other spouse worked
- The monetary value of the assets awarded to each spouse
- The desire to allow possession of the family home or the ability to remain living there for a reasonable length of time to the parent with primary custody of the children
Divorcing couples typically share significant debt like credit cards. It can be challenging to determine who bears responsibility for the charges, so it’s a good idea to request a free credit report from each of the three major reporting agencies. This can help to determine shared debt that should be divided equally from individual debt that the responsible spouse must pay. Unfortunately, spouses in contentious divorces sometimes rack up credit card charges out of spite. If you’re concerned about this possibility, consider signing up for credit monitoring.
Alimony and Child Support
While not applicable in every case, alimony and child support can make divorce expensive. However, children have the right to financial support from both parents despite their marital status. A judge may award alimony if he or she determines that one spouse requires ongoing financial support from the other to live independently. Kentucky is a no-fault state regarding alimony, so actions such as infidelity or abuse have no bearing on whether a judge awards it.
Request a Free Consultation
At John H. Ruby & Associates, we know this is a difficult time for you and your family. We invite you to contact our office in Louisville, Kentucky at 502-895-2626 locally or 888-367-1969 toll-free to learn more about the financial implications of divorce and your next steps in the process.