It is always a difficult decision to file for divorce. It can affect every aspect of one's life including their children, their home, their retirement and their financial stability and there is a sincere fear or concern about the unknown outcomes of the case. This fear of the unknown can be compounded by the uncertainty of the current economy and how that may affect one's financial stability as well. One should not allow these fears to paralyze them and keep them in a bad, miserable or unsafe marriage. Life is short and once that time is wasted you cannot get it back and in fact, this economy may be beneficial in some instances to the filing for divorce.
Should I Wait Until The Economy Stabilizes to File for Divorce?
The answer is no in most cases. Waiting for the economy to change or for inflation to stabilize to deal with one's personal issues is never a good idea and it may not have much if any impact on the outcome of the divorce. There are actually some scenarios where filing for divorce at this point in time may be beneficial. One example would be the situation where the other spouse would like to keep the marital home and the filing spouse would like to keep their retirement accounts intact. The housing market is currently still relatively strong and the value of property is probably somewhat inflated. At the same time, stocks and other retirement type assets have dropped in value significantly. Typically, the parties would share the value of the equity in the house and divide the retirement account equally through the use of a qualified domestic relations order, but the parties are free to negotiate whatever works best for them and it is fairly common to offset one type of property against another.
So in this scenario, the spouse that wants to keep the retirement account intact (spouse A) could agree that rather than the other spouse (spouse B) refinancing the home to pay out the equity, spouse A could retain most or all of the retirement account in lieu of a cash buyout. In addition, because of the pretax nature of the retirement account, spouse A should receive approximately twenty-five (25%) percent more stock than spouse A would have received in equity. This means that if Spouse A would have received $100,000 in equity, spouse A is entitled to $125,000 in retirement account funds, which also allows spouse A to retain a greater percent of the retirement funds. Finally, the costs of sale are not included when calculating the equity of the home in a divorce case, so spouse B will eventually bear all of the costs of the sale of the home which is a further advantage to spouse A. So if one knows that their spouse really wants to keep the marital home, then now would be a very good time to file for divorce before the real estate market drops further.
There are many other scenarios that might make it actually advantageous to file for divorce now despite the current economic uncertainty. If you are considering a divorce but are concerned about the rising inflation and the dropping stock market, please do not hesitate to schedule a consultation with us.