InSight

Divorce Playbook: Remember inflation and accountant for it

Financial Planning Dentist

It is important to remember that all goods and services inflate over time, but they don’t inflate at the same rate. Healthcare and Education have been, by far, the most inflationary elements of financial life for decades. The rising costs of education and healthcare are seemingly limitless. So, if your divorce settlement is going to require you to account for healthcare costs or provide education to a child or spouse, then use a more aggressive strategy for inflation expectations. 

It’s also important to remember that inflation is hyperbolic, no longer. So the younger a child is, the more exposure they have to the effects of education inflation.

A good lawyer will have some expectations for the rising costs of goods and services and should account for that in a settlement. But a great lawyer will make special considerations for parts of the inflation landscape that will uniquely impact you in a post-divorce world.

It is unlikely, you will be able to redress these calculations in post-divorce negotiations, so it is especially important to understand your inflation exposure now, and get accommodations made in writing during the divorce.

More related articles:

Articles
Peter Locke

How do the rich pay less in taxes than you?

A large number, if not the majority of our clients at InSight come to us looking for ways to mitigate their tax liability. While a CPA will find backward-looking ways to lower your tax liability, our clients are working to build a tax ecosystem that mitigates current and future instances

Read More »

Investment Bias: Endowment Effect

This is the belief that you own a “winner” and you will keep that winner for reasons that aren’t justified by the return. Owning companies is fun, and investors like to celebrate their victory over the market by stashing great stock picks in their “stock pickers trophy case.” This bias

Read More »

Investment Bias: Anchoring

Everyone has heard a mantra about first impressions and their lasting impact. That works for investors too. Because our brains thrive on recognizing patterns and the relationship one element has with another. This mental phenomena is called anchoring.  This want for your brain to resort to a reference point and

Read More »

Pin It on Pinterest