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.

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