Money Matters - Breaking Up: Understanding Divorce
BOSTON (CBS) - Divorce is a legal and financial transaction. But because it involves usually two angry people, it is an extremely volatile matter.
- There are over 2 million marriages annually in the US: close to 50% of them end in divorce.
- Second marriages don't fare much better with over 60% ending in divorce.
- Third marriages; 73% end up divorcing.
- Following a divorce; a woman's standard of living and that of the children drop by an average of 27% according to the National Marriage Project at Rutgers University.
- New studies are showing that children do suffer much more trauma than originally thought after a divorce.
- Massachusetts appears to have one of the lowest divorce rates in the nation based on population.
Men and women are getting married later in life but that doesn't appear to be slowing down the divorce rate. And in the past decade, there has been an increase in divorce rates among the boomers. Individuals in their 50s are waking up and thinking who is this person sleeping next to me? The kids are grown, the house is quiet and they don't know each other.
I'm not sure you should go into your marriage thinking you will be ending it, but you should do some planning. If you are the spouse that does not handle the money in your family, you should be looking over the shoulder of the spouse that does. Marriage is a financial as well as an emotional partnership. A recent poll revealed that less than 40% of couples talked about money issues before getting married.
- Understand what the family assets are and where they are.
- How are the assets owned? His? Hers? Jointly?
- What's the family income?
- What are the family's expenses?
- What assets did you bring into the marriage?
Get some professional help. Use a divorce attorney, not the attorney who helped you close on the house. Don't use the same attorney as your spouse and don't use the same financial planner. It is too difficult for an advisor to serve two masters.
Matrimonial law is a $28 billion a year industry. Consider using a mediator before bringing in the big guns. This will save you money and money is a big issue in a divorce. Divorces don't come cheap! Love is grand. Divorce is about 20 grand. Many divorces cost more than the wedding.
Make a list of the stuff that is important to you and how are you going to share them. Such as children, real estate, assets, retirement plans, pension plans, stock options, furniture, pets etc. Pets are considered property and may not be subject to visitation rights or shared custody.
One more thing: Get some counseling for the kids. They often think the divorce is their fault.
