Divorce Financial Glossary

Plain-English definitions of the financial and legal terms you will encounter during divorce. Each entry explains what the term means and why it matters for your settlement.

A B C D E H I M P Q R S

A

Alimony (Spousal Support)

Payments from one spouse to the other after divorce to address income disparity.

B

Buyout (Equity Buyout)

Paying your spouse their share of an asset's equity so you can keep it.

C

Community Property

A system where marital assets are owned equally and generally split 50/50.

Commingling

Mixing separate and marital assets together, which can change how property is classified.

Child Support

Court-ordered payments from one parent to the other to cover children's living expenses.

Collaborative Divorce

A divorce process where both spouses and their attorneys commit to settling without court.

CDFA (Certified Divorce Financial Analyst)

A financial professional specializing in the financial aspects of divorce.

COLA Clause (Cost of Living Adjustment)

A provision that increases alimony or support payments annually to keep pace with inflation.

D

Debt-to-Income Ratio (DTI)

The percentage of monthly gross income that goes toward debt payments.

Discovery (Financial Discovery)

The legal process of gathering financial information from both spouses.

Dissipation of Assets

When one spouse wastes marital funds for non-marital purposes during or before divorce.

Date of Separation

The date when a married couple effectively ends their relationship, which affects asset division.

E

Equitable Distribution

A method of dividing marital property based on fairness, not necessarily 50/50.

H

Head of Household (Tax Filing Status)

A tax filing status for unmarried individuals who pay more than half the cost of maintaining a home for a dependent.

I

Imputed Income

Income a court assigns to a spouse who is voluntarily underemployed or unemployed.

M

Marital Asset

Any property or financial account acquired during the marriage that is subject to division.

Marital Home

The primary residence shared by spouses during the marriage.

Mediation

A process where a neutral third party helps divorcing spouses reach an agreement.

P

Pendente Lite

Temporary support orders that apply while the divorce is pending.

Property Tax

Annual tax assessed by local governments based on a home's value.

Parenting Plan

A written agreement outlining custody, visitation schedules, and decision-making responsibilities.

Q

QDRO (Qualified Domestic Relations Order)

A court order that divides retirement accounts in divorce without tax penalties.

Quitclaim Deed

A legal document that transfers one spouse's ownership interest in property to the other.

R

Rehabilitative Alimony

Temporary support designed to help a spouse become financially self-sufficient.

S

Separate Property

Assets owned before marriage or received as gifts/inheritance that are generally not divided.

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These definitions are for general educational purposes only and do not constitute legal or financial advice. Laws vary by state and change frequently. Consult a qualified professional for guidance specific to your situation.

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