WHAT ARE THE HIDDEN COSTS OF DIVORCE? ANSWERS TO A FREQUENTLY ASKED DIVORCE QUESTION
Divorce costs a lot more than a lot of people suspect. There are many hidden costs, some easily quantifiable and others that require a bit more analysis. But here are some extra costs that I came up with. Keep these in mind as you maneuver your way through the divorce. Actually, when you consider these, you may even change your mind and decide to take additional steps to save your marriage.
Taxes: Taxes can be a huge hidden cost of divorce. You could be liable for taxes after a divorce that you didn’t bargain for, such as the capital gains tax if you got the marital home and then you sell it soon after your divorce. If you are planning to sell the house soon after the divorce, it is something you need to negotiate with your ex: who will pay the capital gains tax? Otherwise, you will be on the hook 100% and it could be a lot, depending on the value of the home at the time you sell it in relation to how much you actually bought the home for. You are taxed on that difference in those two numbers. It is only fair that your spouse eats part of this expense if it has been the marital residence for a long time. But if you don’t deal with this in the settlement agreement and then you decide to sell after the agreement is signed, then you would have to pay the cap gains all by yourself.
Income taxes are another issue to think about. When you divorce, if you get alimony, you would have to pay taxes on that (the spouse who pays can deduct the amount paid from their taxes) however, you don’t pay taxes on child support – child support is tax free (the spouse who pays likewise does not get a deduction).
As far as exemptions on your taxes, the custodial parent usually gets the exemptions but the parties can agree to alternate who takes the exemption. So if you are the non-custodial parent, you need to factor into your calculus that you will no longer be filing a joint return with your ex and if your ex has custody, you lose that exemption. This could increase the amount of taxes you owe, and thus, is a “hidden cost of divorce.”
Legal fees. Sure you pay your attorney are retainer and you think that is just for writing motions and going to court but it isn’t. There are other hidden costs such as telephone calls, photocopying, stamps, messenger services, postal expenses, stenographers, transportation (some attorneys charge for travel costs) copy paper, faxes, appraisers, experts witnesses, and so on. Technically, you even pay for the attorney’s “thinking time” because he or she has to think before she acts on your behalf. That’s a part of billable hours, and thus, a hidden cost of divorce, even though the lawyer would call it something else other than “thinking time.”
Living expenses: Now that you have only one income, expect just about everything to be more expensive from commuting costs, to rent/mortgages to food. Also, now that you are divorced, you will probably need to hire more help with babysitting; you will need to spend more on the kids between the two of you because now that the kids have two homes, they need two beds, two sets of dishes, maybe even two sets of wardrobes. These are big time hidden costs.
Environment costs: They say divorce is not “green” because it forces people to split up into two homes where there normally would be only one. So there are all these added burdens on the environment, additional resources that are used up in additional homes that definitely is a hidden cost, albeit one that affects society more than it does the couple, but they are, nonetheless, hidden costs of divorce.
Emotional costs: Of course, you can’t quantify the emotional cost of divorce but it is one of the hidden costs and it does have a value. Actually, one way to quantify it is to calculate how much you end up spending on shrinks, alcohol, prescription drugs, vacations and other coping mechanisms to see what the hidden cost of your divorce actually is. It is a wrong assessment that you “can’t quantify the emotional cost of divorce.” That is not quite true. You can quantify a part of it. But the pain itself, the emotional pain itself and how it ravages you and your body is a hidden cost, in and of itself.
Children: Divorce takes a toll on children. This is often a hidden cost. Sometimes, the effects of divorce on children is a stealth expense. You can’t really see it; you don’t know exactly when you lost your kids and may not even trace it back to pain from your divorce. But children suffer a great deal from their parents divorce. They suffer emotionally, economically, socially, educationally, mentally.
That is a huge hidden cost that many people don’t think about and calculate as they add up their numbers. And how would one even begin to put a number on their children’s divorce pain?
So, these are a few things I came up with for you to think about as far as how much your divorce actually costs. I’m sure there are other things I haven’t thought of for this post, but I will update this as I think of other costs….do you still want a divorce?
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