Financial Planning in Divorce: The Impact of Child Support
Divorce brings major changes to your life, especially when it comes to financial matters.
Among the many considerations during the divorce process, it’s very important to understand the impact of child support on your financial planning. Child support is necessary for ensuring the wellbeing of your children.
Having a knowledgeable and strategic approach to the financial aspects of your divorce will allow you to develop an airtight financial plan for the years ahead, once the divorce is all said and done.
Recognize the significance of child support
Child support is a legal obligation that’s specifically designed to provide financial support for your child’s needs. It covers expenses for things like education, healthcare, housing, and daily necessities.
Making child support a major priority during divorce proceedings will have a positive outcome for your child– which should be the most important thing!
Assess your current financial situation
Start by evaluating your current financial situation. This means taking thorough stock of your home, income, assets, debts, and expenses.
Understand the financial resources available to you and the potential impact that child support payments may have on your budget. Having a full knowledge of your financial situation, and preparing for the possibility of child support payments, is a great way to help you make informed decisions in court.
Understand state child support laws
Each jurisdiction has slightly different child support requirements, so it will definitely be helpful to understand your state’s laws.
Keep in mind some of the factors that courts consider, like income, custody arrangements, and the number of children involved. Being prepared for these considerations will help you anticipate potential future payments– and plan accordingly.
Consult with a financial advisor
Because divorce can become a financially complicated situation, it helps to meet with a financial advisor who can help you fully understand the situation and prepare for various scenarios depending on court outcomes.
A financial advisor can help you to develop a comprehensive financial plan, so that no matter what the court decides, you’ll be ready to handle it. They can also help you deal with other aspects of the divorce proceedings, like asset division, budgeting, and long-term financial goals for your wellbeing and that of your child.
Consider tax implications
Child support payments are typically not tax-deductible for the paying party, and are not considered taxable income for the receiving party. However, other aspects of divorce– like spousal support or property division– may have tax implications.
Your financial advisor or tax professional can help you to understand the tax consequences of various financial decisions related to your divorce.
Work with a family law attorney
Because divorce proceedings can be so complicated, it’s highly beneficial for people to seek legal counsel from experienced family law attorneys. At Digby Law Firm, we’ve got decades of trial experience plus extensive legal knowledge to present the best case possible to the person who matters most: the judge.
If you’re ready to get started, give us a call or reach out to schedule a consultation today.
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