If I leave Arizona, post-divorce, would it cost me more? Or less?
As a divorce financial advisor here in Arizona, I see this a lot. Is the grass greener—at least financially—in a different state? Should you move to another state after your divorce? Would I still be able to help you in that case? (Spoiler alert: Yes.)
As a CPA, a CERTIFIED FINANCIAL PLANNER® professional, and a Certified Divorce Financial Analyst® professional who provides divorce financial counseling for affluent women in the next chapter of their lives, let me weigh in on the Arizona/non-Arizona discussion.
Why move?
Most of the move-out-of-Arizona conversations I’ve had with clients involve women whose kids are grown. If you end up with a parenting agreement, for example, that binds you to the state of Arizona, this discussion won’t apply to you.
But let’s say the kids are grown. Let’s say they’ve moved to a different state—there’s a reason, right there, that many women would factor into their leaving-Arizona calculus.
Here’s another: I’ve seen plenty of women who grew up elsewhere, only to re-locate to The Grand Canyon State because their husband’s job required it. And now they want to go “home,” to their old stomping ground… and their old climate.
Yet another reason to move, not necessarily out of the state, but out of the local area: If you remain planted where you are, odds are you’ll run into your ex… and your ex’s friends… at places, which you can’t avoid, where you used to go with your ex. In a word, Uggh.
So there are plenty of valid reasons for moving. If that’s what you want to do, I will support you. And I’ll help you with your decision.
Three kinds of taxes
Big question: Will it cost less to move somewhere else? Just last year, Arizona moved to a 2.5-percent income-tax rate, making it the lowest flat-tax state in the country.
Wow!
But you likely know that there are states that have zero income tax. Florida, Texas, Wyoming, and Nevada come to mind. (There are actually four more… Alaska, anyone?)
But before you start packing your bags, consider this: Any state—any state—needs money to make it run. If a state has zero income tax, then they’re getting it somewhere else. Case in point: Right after the state of Arizona lowered its income tax, the Phoenix City Council raised the sales tax to “offset” the reduced revenues!
And Texas has no income tax! But they make up for it with massive property taxes.
Let’s talk about sales tax again. That’s a stealthy one. It affects every single thing you buy. Don’t ignore it if you’re considering a move.
Where to go… or not
From a financial perspective, some of your assets are more “portable” than others. If you’ve got liquid assets, you can manage them from anywhere: You can move your cash to another bank. Or you can move your investments to another custodian.
If your wealth is tied up in real estate or a business, that gets more complicated. But I can help you with those conversations, too.
Just as I’d mentioned the three types of taxes (income, property, and sales) above, there are some obvious states that, unfortunately, deliver the “triple whammy” of all three: I’m talking to you, California, New York, New Jersey, “Taxachusetts,” and others!
That said, the best state to live in is the one that will make you happiest.
Let me help you create a plan for your post-divorce financial life, wherever it may be. Contact me today.
