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Question

How do finances work in a divorce?

Answer

Divorce finances can be complex, and when coupled with a potentially emotionally-charged situation, they can be explosive. That’s why we believe it’s in your best interests to get an object third party in the form of a divorce financial advisor to help guide you through this challenging time. Some key subjects to know about:

  • Asset Division: Each state has different rules that affect how assets and debts are classified and divided (see the next section for more detail), and if you have a prenuptial agreement in place, that may also factor into the details of your divorce agreement when it comes to asset division.
  • Alimony: May be awarded to a spouse to provide ongoing financial support after a divorce. The amount and duration are determined by things like marriage length, each spouse’s income/financial situation, contributions to the marriage (e.g. stay at home parent), and lifestyle during marriage.
  • Child Support: If you have children, the non-custodial parent may have to pay child support to the custodial parent to help cover expenses like childcare, education, and healthcare. These often follow state guidelines.
  • Financial Disclosure: Both parties are generally required to provide a full picture of their financial life, including assets and debts, plus regular income and expenses.
  • Retirement Accounts: Gains in retirement accounts like 401ks may be subject to division. A Qualified Domestic Relations Order (also called a QDRO) is used to avoid tax penalties during the division. Of note: You’ll want to be sure your beneficiaries are up to date on all accounts. If your ex-spouse is still listed as the primary beneficiary on your account when you pass, they will be entitled to receive these assets, even after a divorce.
  • Taxes: You may have a change in filing status after your divorce. It’s in your best interest to work with a CPA or other tax professional to determine what your tax liability could look like post-divorce. You may also have one-time or limited time taxes on asset transfers, alimony payments, etc., that you’ll need to factor into your financial plan.

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Last Updated May 14, 2026
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