20 Common — but False — Beliefs About Divorce and Money

Divorce and money
pathdoc / Shutterstock.com

When people end their marriages, they often discover that many of their beliefs about divorce and how it affects your finances are not correct. Divorce attorneys often must help clients separate the myths from the realities.

The costs of divorce and dividing marital assets can be considerable. If you decide to end your marriage, it’s important to have a realistic view of how it will affect your bank account. We’re here to dispel the following myths so you don’t get caught by surprise.

1. Keeping cash in a separate account protects it from your spouse

alexmak7 / Shutterstock.com

Although many people believe this to be true, it’s definitely not. “This is an old wives’ tale,” Florida divorce attorney Eric N. Klein tells Money Talks News.

When going through a divorce, you have to complete a financial affidavit, swearing that all of the information is accurate, he explains. All assets accumulated during the marriage are subject to an equitable distribution. That means money that either spouse has saved must be disclosed at the time of final judgment.

2. Women automatically win custody of kids

Mother and child, home office
Evgeny Atamanenko / Shutterstock.com

The notion that women automatically win custody of children in a divorce simply isn’t true, says Klein. “There was a point in time where that may have been the case, but no longer,” he says.

Custody issues are important, and they can affect your future financial commitment. According to The New York Times:

“The ‘tender-years doctrine,’ a court presumption that mothers are the more suitable parents for children under 7, was abolished in most states in 1994.”

That means men, in theory, have an equal chance of winning child custody in a divorce suit.

Despite equality under the law, a disproportionate share of women end up winning child custody. According to a U.S. Census Bureau report issued in 2013, only 1 of every 6 custodial parents are fathers.

3. You don’t have to worry about your spouse’s credit card debts

Depressed-looking woman with hand full of credit cards.
Andy Dean Photography / Shutterstock.com

If a credit card is in your name as well as your spouse’s, both of you are on the hook for repayment, Asheville, North Carolina-based financial planner Jean Marie Dillon tells Money Talks News.

“If cards are held jointly, the spouses are jointly responsible for the debt,” she says. “Prior to a divorce, it is not uncommon for the spouse of lesser means to go on a spending spree and leave the other spouse holding the debtor’s bag. If the debt goes unpaid or delinquent, then both spouses take a hit on their credit scores, and that hit will remain after the divorce.”

4. Women never pay alimony

pathdoc / Shutterstock.com

While men once were the principal breadwinners in marriages, the nature of the American family and its finances has changed. In many relationships, the woman now is the top earner.

“If the wife is the breadwinner and the husband has a lower-paying job and/or is the custodial parent of the children, it’s quite common for women to pay alimony,” Justin Wood, a mediator and arbitrator in Oklahoma City, tells Money Talks News.

5. You can judge the quality of divorce attorneys by their fees

Man throwing cash in the air.
BlueSkyImage / Shutterstock.com

While people tend to get what they pay for when it comes divorce attorneys, the difference in hourly rates isn’t a good indicator of the quality of their work, Denver-based attorney, arbitrator and mediator James Cordes tells Money Talks News.

He recommends that you look for a divorce attorney you can relate to who will work to get you the best result without overcharging.

6. It will help your case to show your spouse cheated

bbernard / Shutterstock.com

You may feel outraged if your spouse commits adultery, but moral indignation likely won’t help when you divide assets.

Most states have some type of “no fault” divorce law, says Ken McRae, a family law and divorce attorney in Overland Park, Kansas. McRae tells Money Talks News that this means the court doesn’t concern itself with who caused the breakup. “As a result, an affair will not usually impact the division of assets or debts,” he says.

7. The house is the biggest asset at stake

Grigory Ignatev / Shutterstock.com

Sometimes the value of vacation homes, individual retirement accounts and businesses exceed the value of primary residences.

“It all depends on the people and how they spent, saved or invested their money,” says Wood. “Nothing should ever be taken for granted, and questions should always be asked and evaluations made.”

8. You have plenty of time to remove your ex from a life insurance policy

funeral procession
Kzenon / Shutterstock.com

People who delay removing an ex-spouse as the beneficiary of a life insurance policy following a divorce are making a big mistake. No one knows when their life will end. If you die before you change the policy, your ex likely will receive life insurance benefits, even if you have remarried since the divorce.

After a divorce, you should review your life insurance policy and any account where you have named a beneficiary, says McRae.

“Often, people will make a beneficiary designation and forget about it,” he says. “You may have forgotten to add your younger children, or you may still have ex-spouses listed as beneficiaries.”

9. If your ex doesn’t pay child support, you don’t have to allow visitation

wavebreakmedia / Shutterstock.com

Two wrongs don’t make a right. While it may not seem fair, courts typically enforce child visitation rights, even if there is a dispute over child support.

For example, the Colorado Department of Human Services states that a parent’s right to visitation exists independently of the payment of child support. Your ex may be a deadbeat, but he or she still has the right to see their child.

10. It’s best if you delay divorce until your children are grown

College graduation
Syda Productions / Shutterstock.com

Many people put off a divorce for the sake of their children, but Klein thinks that’s a “big mistake.”

“Do you really want to raise children in a house where there is no love and affection between the parents in addition to the animosity, anger and arguing?” Klein asks. “In my personal opinion, it’s better to divorce so that the children are not conditioned to believe that constant arguing is a way of life as part of a marriage.”

11. If your spouse doesn’t know about your assets, he/she can’t claim them

Liar
fizkes / Shutterstock.com

When it comes to disclosing your assets, it’s best to be honest. McRae notes that most divorce settlement agreements include a provision that provides that if one spouse hides an asset and the other party subsequently finds out about it, the entire asset is forfeited.

If you place $100,000 in a hidden account and your ex learns about it, they could get the entire amount, McRae says.

“Also, there are some high-profile cases of people spending very long periods of time in jail for contempt of court when they refuse to reveal assets the court believes they have hidden,” he says.

12. It’s important to fight for everything you’re entitled to receive

cash
Nomad_Soul / Shutterstock.com

Divorcing spouses can save themselves time and money if they agree to divide assets in a spirit of compromise.

“People will fight over things they do not really want or need because emotions can be overwhelming,” says McRae. “Sometimes it is out of a desire to hurt or deprive the other party, sometimes it is because a particular item has a memory attached to it.”

McRae says he generally recommends focusing on “the three things you most want out of the divorce and being willing to compromise on other things in order to achieve those top objectives.”

13. You’re always better off settling out of court

Handshake
Mongkol Foto / Shutterstock.com

While it’s usually less expensive to settle a divorce amicably, there are times when a trial is necessary. In some cases, one spouse may want to settle the case, but the other won’t cooperate.

If you believe your marital partner is deliberately hiding wealth, you may need to bring your case before a judge in order to get an equitable distribution of assets.

14. If you have sole custody, you are free to move out of state

Family moving day.
sirtravelalot / Shutterstock.com

In general, a child can’t be moved out of state by a custodial parent without permission from the court that issued the custody order. That means a parent with sole custody may not be able to accept a job that would take them and their child to another part of the country. The noncustodial parent may oppose such a move.

Having custody doesn’t negate your ex’s right to see their child, Wood explains. “Usually, you must remain within 60 miles of each other, unless agreed or awarded otherwise,” he says.

15. You should make major purchases before a divorce

ND3000 / Shutterstock.com

People often believe they should make a big purchase — such as a new car — before they file for divorce. The goal is to make the purchase before the court places a restraining order on large expenditures, to prevent a spouse from dissipating jointly held assets.

In reality, the court likely will make sure your spouse is properly compensated for any large expenditure you make using shared assets. Your ex could even end up owning an item you bought for yourself prior to the divorce. It could be argued that you made the purchase “as means to defraud the other party out of money for self-gain,” Wood says.

16. Most divorce cases go to trial

sebra / Shutterstock.com

In reality, trials are the exception rather than the rule. The vast majority of divorcing couples find it less costly to resolve disputes out of court, says McRae.

17. Both parties must agree in order to divorce

Victor Tongdee / Shutterstock.com

You don’t need to have your spouse’s permission to get divorced, although it’s easier and cheaper if you do. If one spouse declines to sign divorce papers, the spouse seeking the divorce will need to obtain a contested divorce by filing a petition in court.

“You may have to have a trial,” says McRae.

If the case goes to trial, the court will decide on all settlements and divisions of property. Having a contested divorce means you likely will spend more money on legal fees.

18. It is better to get the house in a divorce settlement

Stephen Coburn / Shutterstock.com

While there is security in owning real estate, seeking a home in a divorce isn’t always the right financial move. If there is an outstanding mortgage and the spouse can’t afford to keep up the monthly payments, he or she could end up losing the property to foreclosure.

It’s also important to be aware that real estate values fluctuate. If someone decides to sell the home during a drop in the housing market, he or she could end up receiving less money than the home is worth at the time of the divorce settlement.

19. Both spouses will enjoy the same standard of living after divorce

wealthy
Nejron Photo / Shutterstock.com

No divorce agreement can guarantee that you’ll have the same standard of living after you separate. That’s because it’s more expensive to support two households than to share expenses with someone else.

In some cases, both divorcing spouses may see their standards of living decline following a divorce.

20. Private investigators and forensic attorneys are too expensive

Ollyy / Shutterstock.com

Hiring an investigator or forensic attorney to find out more about your spouse’s finances can be money well-spent if a spouse is hiding wealth.

Before you can get a fair division of assets, you need to know exactly what they are. If you’re dealing with a spouse who is deceptive, this can be a challenge, and hiring a specialist may be necessary.

Often a superficial examination of assets can leave a lot of money on the table, says Cordes.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
5 Medicare Mistakes to Avoid for a Healthy Retirement
5 Medicare Mistakes to Avoid for a Healthy Retirement

Medicare can be confusing. Beware these missteps — which can hike your costs.

7 Tricks to Cleaning Your Bathroom Faster
7 Tricks to Cleaning Your Bathroom Faster

These tips can get your bathroom sparkling with little time and no elbow grease.

8 Key Steps to Planning for Retirement as a Couple
8 Key Steps to Planning for Retirement as a Couple

Ready for retirement? Not so fast. You might be surprised at some of the issues that come up for couples when they plan.

5 States With the Worst Health Care for Retirees
5 States With the Worst Health Care for Retirees

All of these states are located in the same region of the nation.

The Worst Nursing Homes in America Are Revealed
The Worst Nursing Homes in America Are Revealed

The nursing homes with a history of providing subpar care previously hadn’t been identified for a government list.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

How to Buy Gas At Costco Without a Membership
How to Buy Gas At Costco Without a Membership

The warehouse club often has some of the cheapest gas in town. Here’s how you can get it as a nonmember.

10 Things to Stop Buying If You Want a Clutter-Free Home
10 Things to Stop Buying If You Want a Clutter-Free Home

If you like to keep things simple, avoid these purchases.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Vacuums from this brand can last a half-century, if not longer — and they’re hot on the resale market.

A Simple Way to Silence Robocalls Today
A Simple Way to Silence Robocalls Today

A few steps can keep your phone from ringing when a spammer calls.

This Company Makes the Best Tires in America
This Company Makes the Best Tires in America

Driver satisfaction with tires is at an all-time high, but one brand stands out.

This Health Issue Can Hint at Dementia Years in Advance
This Health Issue Can Hint at Dementia Years in Advance

One type of pain is especially associated with cognitive decline.

Can I Switch to Spousal Social Security Benefits When My Ex Dies?
Can I Switch to Spousal Social Security Benefits When My Ex Dies?

Knowing when to claim can help you maximize benefits.

36 Things That Will Be Obsolete Soon
36 Things That Will Be Obsolete Soon

The writing is on the wall for dozens of things we have grown up with.

Medicare Will Not Cover These 6 Medical Costs
Medicare Will Not Cover These 6 Medical Costs

Don’t let these health care expenses catch you off guard in retirement.

8 Things You Should Always Buy on Amazon
8 Things You Should Always Buy on Amazon

The giant retailer shines when it comes to these things, from basics to hard-to-find specialty goods.

8 Federal Income Tax Breaks for Homeowners
8 Federal Income Tax Breaks for Homeowners

Some of these deductions and credits are available to a wide swath of homeowners.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

5 Ways to Fill Your Pantry With Free Food
5 Ways to Fill Your Pantry With Free Food

Anyone can take advantage of these resources.

10 Types of Retirement Income That Are Not Taxable
10 Types of Retirement Income That Are Not Taxable

There are lots of things Uncle Sam can’t touch — so long as you play by the rules.

6 Reasons You Should Stop Hiding Cash at Home
6 Reasons You Should Stop Hiding Cash at Home

Stashing money around the house is anything but harmless.

17 Surprising Things You Can Sell for Extra Money
17 Surprising Things You Can Sell for Extra Money

You probably don’t realize these items are worth decent cash.

5 Products You Should Never Buy Generic
5 Products You Should Never Buy Generic

Sometimes the brand-name version is clearly superior.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.