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Divorce Brings Emotional and Financial Pain

Few occasions in life are more joyous than a wedding. It’s typically filled with celebration, romance, and the promise of spending a lifetime together.

Conversely, there are few things as painful as the ending of a marriage that began with such promise. The unfortunate reality is there’s a 50-50 chance that what started out in wedded bliss will end bitterly in a court of law.

If you are heading into a divorce, here are a few tips that may make the transition a little easier financially.

While I’ve seen many divorces start out “amicably,” I’ve seen very few end that way. While your divorce may be the exception, I would suggest you plan for things to get contentious.

A divorce is more than the termination of a marriage. It’s also a major financial event that can have repercussions for many, many years to come. Think of it as the dissolution of a business. This is not something you want to go about casually or do on a handshake. You need to get competent advice—sooner rather than later.

The type of advisors you will need depends greatly on your situation. The more assets you have and the longer you’ve been married, the more advisors you may need.

A young couple married only a short time, with very few assets or liabilities and no children, may very well be able to use one attorney or a mediator to settle things quickly and fairly. A couple married 15 or 20 years, who have children and who have accumulated assets and liabilities, will certainly each need an attorney. They would also do well to each engage a therapist for themselves and their children. They could also benefit from consulting with an accountant, financial planner, and an appraiser if they own real estate.

If you’ve been a “stay at home” spouse and sacrificed your career to raise children, you would greatly benefit from getting some career counseling. While you may receive child support or some alimony from your former spouse, the chances are it won’t be for as much or as long as you would like. There is also the risk that your former spouse may pay erratically or not pay at all.

Unless you can live exclusively off the earnings of assets received from the divorce, you will need to become employed. For anyone who has been out of the workforce for a long time, this may mean heading back to school and obtaining several years of education. If you can’t find or afford a career counselor, a great book with a lot of helpful exercises is Career Ownership, by Janine Moon.

There is no greater threat to your net worth than a divorce. Unless you are very wealthy, it’s a financial game changer. The reality is your lifestyle will almost certainly decline. It’s critical to actively plan for that new lifestyle as part of the divorce process. Creating a spending planis very important. Is this difficult? Yes, for most folks it is. It’s hard enough to create a spending plan in good times, much less in the chaos of your world being ripped apart. Yet this will give you vital information to help you evaluate and intelligently respond to settlement proposals.

Finally, resist taking the attitude, “I don’t care what it costs me, I just want to be done with it!” Avoiding the discomfort of negotiating and dealing with conflict may seem easier now. Yet chances are great that you’ll regret it later. A divorce is financially and emotionally devastating enough. Don’t make it worse by allowing your own beliefs to sabotage your future.

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2 Responses to Divorce Brings Emotional and Financial Pain

  1. George W. Chell October 31, 2011 at 8:38 am #

    Great article. Must read,for couples contemplating divorce. Wifes usually take financial beating.

  2. Richard Trachtman, Ph.D. October 31, 2011 at 10:59 am #

    Dear Rick,

    While there is much valuable advice in your blog, Divorce Brings Emotional and Financial Pain, as a divorce mediator (as well as a child and adult psychotherapist and marriage counselor) I would like to correct some mistaken suggestions on your part.
    You should not lump attorneys and mediators together (mediators are usually either attorneys or social workers who are also trained in mediation which is a separate profession). You write “A young couple married only a short time, with very few assets or liabilities and no children, may very well be able to use one attorney or a mediator to settle things quickly and fairly. A couple married 15 or 20 years, who have children and who have accumulated assets and liabilities, will certainly each need an attorney.” That is incorrect on at least two counts. Although lawyers may settle things fairly even for those who have children and accumulated assets, their role and training is to gain the greatest advantage for their clients. This often leads to bitter controversy and to settlements that are contested long after the divorce – with payment schedules and visitations schedules being ignored. The role and training of a divorce mediator is to engage both parties in a cooperative and fair negotiation that are acceptable to both parties and are more likely to be honored in the future. Mediators are trained to help the clients assess their future needs as well as their assets (using whatever resources – appraisers, financial planners etc. may be called for) even when assets are substantial and the financial picture is complex.
    With a memorandum of understanding (MOU) created within the mediation process, the couple may choose to have separate attorneys to review their agreement, but they may also ask one mediation friendly attorney to translate their MOU into legal language that can be brought to a judge for ratification. Using one attorney to represent them both is cheaper and less likely to result in litigation.
    I urge any couple planning to divorce, if they desire a fair and cooperative negotiation, to contact their state divorce mediation association.
    To further explain the process, here is part of a handout I give to clients who are planning a divorce.
    DIVORCE MEDIATION; WHAT IS IT?
    Approximately 50% of American marriages end in divorce and about 25% the children will live in a single parent family at some time in their lives. When people engage opposing attorneys to help them divorce they begin an expensive adversarial process which often entrenches anger and bitterness and takes the power to create solutions out of their own hands. Divorce mediation is a better, shorter, very much cheaper alternative to the alienating and destructive legal/adversarial process that occurs when two parties engage opposing lawyers.
    BETTER? Divorce mediation empowers the couple to handle their own negotiations, making them active at a time when they most need to feel in control. It builds competence in decision making, communication skills and, often, an atmosphere of trust and cooperation, all of which will help them in their continuing shared role as parents. The couple is helped to separate their spousal roles, which are ending, from their parental roles, which will continue. The mediator helps them evaluate their present financial situation and future needs, making sure that decisions are based on openly shared information and reasonable assumptions rather than on threats, manipulation or concealment. Most mediations include agreements on parenting arrangements, parental decision making, division of property, spousal maintenance (alimony) and child support. With divorce mediation there are no winners or losers, only solutions that are fair and acceptable to both parties. Because both parties take an active part in shaping the agreement they can both have a sense of ownership of the results. That is why agreements arrived at in mediation tend to hold up

    SHORTER? In many cases divorce mediation requires only 3 to 12 hours.

    CHEAPER? In 1996 (when I was trained in mediation – costs are probably higher now) the average retainer for matrimonial attorneys in New York City was $7,500 for each person or $15,000 for the couple – just to begin the adversarial process. Because mediation is much shorter, only one professional needs to be involved, and mediators generally charge less than attorneys, a complete mediation can easily cost a very small fraction of just starting legal proceedings. And the mediator may be able to help the couple reduce the tax consequences and other costs of separating. The couple will still need to see their lawyers, but only to review and translate their MOU into a legal separation agreement, and to file papers. This will still be far less expensive than having the lawyers involved from the beginning.

    How Does Divorce Mediation Work?

    The mediator is a facilitator who guides the couple through the negotiation process. He helps the couple separate their spousal roles, which are ending, from their parental roles, which will continue. He helps them evaluate their present financial situation and future needs. He guides the process making sure that decisions are based on openly shared information and reasonable assumptions rather than on threats, manipulation or concealment. He helps the couple move from opposing positions to the creation of options from which they can settle on one agreement that is fair and acceptable to both. The mediator also sets the agenda, organizing the discussion in an efficient way, keeping the couple on track with each area of concern to be discussed: parenting arrangements (residence of and access to the children as well as parental decision making); division of property; spousal maintenance (alimony) and child support. But the couple controls the content by presenting their concerns, explaining their needs and wishes, thinking up many of the options from which the agreement will emerge and, ultimately accepting or rejecting the outcome of the mediation. This gives the clients a sense of control at a time when their lives seem to be falling apart, and a sense of ownership of the outcome. Because both parties have agreed on issues of parenting and support both parents are much more likely to remain involved in parenting, to meet their financial obligations to the children and to cooperate with each other in the future. When issues do come up in the future that they can not resolve themselves, they are more likely to return to mediation rather than turn to the courts or become adversaries.