Working women in Virginia and around the country are often left financially vulnerable by divorce. A study conducted by the London School of Economics reveals that working wives see their incomes fall by an average of 20% following a divorce while husbands earn about 30% more after ending their marriages. This drop in income makes life especially difficult for divorced wives because women generally earn less than men to begin with.
Women also live longer than men on average, which means that divorced wives must be more careful with their retirement savings than their former husbands. A recent change in the way alimony is taxed dealt spouses who rely on this money yet another blow. For many years, divorced spouses who received alimony did not pay tax on this income, and divorced spouses who paid spousal support were able to deduct the payments. This situation was reversed in January 2019.
These and other factors have led to a growing number of divorced wives falling into poverty. Poverty rates are three times higher among divorced women than they are among divorced men, and most experts expect this gender wealth gap to grow even wider in the years ahead. However, the financial news for divorced nonworking spouses is not all bleak. The Social Security Administration allows divorced spouses who were married for at least 10 years to receive benefits based on the contributions of their working husbands or wives.
Experienced family law attorneys will likely be aware of these financial challenges, and they may help spouses who could be left in precarious situations by a divorce to prepare for property division and spousal support negotiations. Attorneys may also ask forensic accountants to check financial disclosure documents to ensure that all assets have been accounted for so that negotiations may be conducted in good faith.
Source: Forbes, How The Tax Laws For Divorce Will Turn Upside Down In 2019, Dean Hedeker, Dec. 4, 2018