You’ve spent years planning your life together. All of your plans involved you both remaining together as a couple. You got a house big enough for the two of you. You took a job with better insurance but less opportunity so your partner could do the opposite. You saved your partner’s income and you spent yours to support each other. You bought a vacation home that both of you could retire to.
Now you’re considering divorce and you’re realizing that all those plans were either pointless at best or foolish at worst. With the future now uncertain, you’ll experience anxiety regarding what your future will look like and how you will be able to afford that future.
The cost of the divorce
I go into the cost of the divorce itself at length in this article. In summary, a divorce costs between $ 1,500 and $ 15,000 based on the size of your assets and the disagreement between you and your spouse on how to allocate assets, income and (especially) time with the children.
Divorce expenses are paid through an initial retainer and then any remaining fees are usually paid from the marital asserts.
I tell my clients, “Your assets are like a pie. You can cut the pie in two right away. One slice for you and one slice for your ex. Or, you can cut the pie in three over time. One slice for you, one slice for your ex, and one slice for the attorneys, mediators, and other experts who will help you ‘slice’”
Supporting yourself post-divorce
If you are the party who earned less than the other party, you will now have to support yourself. You may receive some help from your ex via maintenance (formerly known as alimony) and/or child support.
The important thing to consider is what will the limits of that maintenance and/or alimony be.
In Illinois, you will not receive maintenance that will cause your income to be in excess of 40% of the combined income of you and your spouse.
“The amount calculated as maintenance, however, when added to the gross income of the payee, may not result in the payee receiving an amount that is in excess of 40% of the combined gross income of the parties.” 750 ILCS 504(b-1)(1)(A)
This means that you can establish an effective floor and ceiling as to what your lifestyle will be like post-divorce: 40% of your previous joint income.
Child support can go beyond this 40% threshold but please review for yourself what the child support amount would likely be on the Illinois Health and Family Services website. It will almost always be less than what you expected.
Children’s expenses are almost always divided 50/50 or proportionally to the incomes of the parties. Virtually every expense for the children beyond food, shelter and clothing can be divided.
Supporting Your Ex After Divorce
As many judges have admonished my clients, “You used to have two incomes supporting one household. Now you have one income supporting two households.”
The new maintenance (formerly known as alimony) law will take effect on January 1, 2019 and reads “The amount of maintenance under this paragraph (1) shall be calculated by taking 33 1/3% of the payor’s net annual income minus 25% of the payee’s net annual income.”
The amount of maintenance payable will not surpass your ex-spouse’s income plus the maintenance up to 40% of the combined income of you and your spouse. This sounds complicated so let me illustrate by example. If you make $ 100,000 and your spouse makes $ 20,000, the maintenance you’d have to pay would not exceed $ 28,000 because ($100,000 + $ 20,000) X 40% is $ 48,000. $ 48,000 minus the income he or she already makes, $ 20,000, is $ 28,000.
The maintenance will be ongoing until it terminates based on a complicated formula which is determined by the length of the marriage before the filing of the petition for dissolution.
After maintenance is determined, child support is then calculated based on the two parties’ incomes which include deducting the maintenance payments from the payor and adding the maintenance payments to the payee’s income.
Then, any non-basic expense for the children shall typically be split 50/50.
It is completely conceivable that between maintenance, child support and child expenses that the supporting spouse could pay over 50% of his or her income to the supported spouse.
For this reason, many high earning spouses prefer to eliminate maintenance entirely by offering the other spouse a larger share of the marital assets in exchange for waiving maintenance.
Living on less
Whether you’re making the same amount as your ex-spouse, being supported by your ex-spouse or supporting your ex-spouse, you should be able to approximate what your income will be in the future: about half of what it is today.
If your income is reduced by half, then your expenses, logically, must be reduced by half, as well.
This almost always comes down to housing expenses. You will have to move into a smaller house. One party can move anywhere they want with total disregard to the school district so long as the other party is listed as the residential parent for the purposes of school residency.
Secondly, marital assets often get cashed out to buy a new house, new car, etc. With these expenses resolved, living on half of your previous income becomes a feasible endeavor.
Your future income.
The moment after the divorce is finalized is always your net income nadir and the peak of your expenses. Why? Because you were probably trying to prove to your ex and the court that you didn’t make much money and had lots of expenses in order to minimize or maximize the support you’d pay or receive.
Your income will only get better in the future. Your expenses will only reduce as you age out of maintenance and your children age out of child support.
Finally, you are very likely to get remarried which will effectively double your income again. 80% of people who divorce get married again.
My personal experience is that I often run into my clients years after I had divorced them. They are happier. They are healthier. They look younger. Their divorce did not turn them into miserable paupers. Their divorce opened up opportunities for them both personally and professionally.
Contact my Chicago, Illinois law office to schedule a free appointment to learn about your future after divorce.