Articles Posted in Economics and Divorce

When a couple divorces, it is usually the case that neither party gets everything he or she wants. Understanding and accepting this fact before you start the divorce process can help make the process less costly – both financially and emotionally.

One of the many things I have learned from my family law clients over the past 20+ years is that when they strive for an outcome (whether via agreement or court order) that provides them with everything they want, they are inevitably disappointed. Perfection is not achievable in life and it’s certainly not achievable in divorce. Instead, I encourage my clients to think about what a “good enough” outcome would look like.

For example, if we’re talking about spousal support – How much money per month do you really need or can you afford to pay? What are the most realistic options that are available to you now that there will be two households instead of one? Many times sketching the financial picture makes people cringe – especially if they’re being told things that they don’t want to hear, such as “You have too much debt,” or “You’re going to have to return to work.” But sometimes there is no way around these facts. It’s better to accept reality and work within those parameters, rather than to strive for an outcome that may look perfect to you but will leave your soon-to-be ex (and perhaps the children) suffering terribly.

It is possible to make the divorce process more time- and cost-effective?

When potential clients consult with me in connection with their divorce, one of the first questions they ask is, “How much do you expect this to cost?” and one of the second questions is, “How long do you expect this to take?” Time and money are, understandably, major concerns of anyone entering the divorce process, so I know that these clients want to hear answers that reflect a best case scenario. I can never predict the exact end date or the costs involved, but I can tell these clients that the more of these tips they follow, the more likely their divorce process will run smoother and be more cost-efficient:

1. Make sure your spouse knows that you want to end the marriage. It’s understood that asking a spouse for a divorce can be difficult, emotional and frightening, but try to find a way to broach the subject before you retain an attorney. Perhaps you can engage a therapist, marriage counselor or trusted friend to help you have this conversation. One of the least productive ways to start the conversation is to have an attorney send a letter to your spouse announcing your intention to divorce him or her. Remember, your spouse will have to first get over the emotional shock before any productive discussions can take place.

Lately, women are being encouraged to “Lean In”, which is the title of Sheryl Sandberg’s book that encourages women to take an active role in their career development. So I found it very interesting to read an article in the New York Times Magazine titled “The Opt-out Generation Wants Back In“. It not only spoke to me because of how confusing all of these messages can be for women, but also because as an attorney and mediator who works with divorcing couples, I’ve seen the fall-out when women who opt-out of viable careers to devote themselves to their families end up divorced.

The story, written by Judith Warner, is part longitudinal study and part confessional, covering the lives of three women over ten years who decided to “opt out” of the working world to take care of their children. With husbands who brought home mid-six figure salaries, it seemed to them like the ideal opportunity to step off the career track and choose instead to be home with their children.

But for the women in the article, betting on “perfect” did not pay off. For example:

“To be one, to be united is a great thing. But to respect the right to be different is maybe even greater.” – Bono

In my last blog, I discussed the phenomenon of “gray divorce” and touched on some of the unique issues that older couples face when divorcing. In this post, I will share some thoughts on how effectively the mediation and collaborative law processes can meet the unique needs of these parties.

In my mediation and law practice, I have observed that unlike younger couples who are divorcing, older couples are frequently more civil toward each other and their interactions are less characterized by anger. As a mediator and collaborative lawyer, my role is to help the parties avoid court intervention and resolve their issues in a way that will keep the focus on their needs and goals, rather than their “positions.” This works particularly well in cases of gray divorce. To rework a phrase popularized in the ’60s, while older couples might choose to separate because they are no longer making love, it is often not because they are making war.

Is 60 the new 40?

If we follow the guideposts reflected in pop culture, the answer is a resounding “yes.” The new face of MAC Cosmetics is a 90-year-old woman. Christopher Plummer won this year’s best supporting actor Academy Award for his role in Beginners, in which he portrayed a a 70-year-old man who reveals that he is gay following the death of his wife. Online dating services such as Gray Date and Our Time are emerging for singles 50 and up. This could be because the phenomenon of couples divorcing after the age of 50 has grown exponentially in the past two decades.

In my own mediation and law practice, I am seeing a definite trend towards what is known as “Gray” Divorce. While the overall divorce rate has gotten lower, according to Gray Divorce and Remarriage, “Boomers, born between 1946 and 1964 already have a divorce rate triple that of their parents.”

The issue of temporary maintenance for a spouse pending the conclusion of a divorce is often a challenging and divisive aspect of the divorce or separation process, and clarity in how awards should be granted is a key aspect of promoting equity. Kudos to the First Department for providing clarity to the new temporary maintenance guidelines that were signed into law in 2010. In what is the first Appellate Division case to date interpreting this legislation, in Khaira v. Khaira, the Appellate Division First Department ruled that it was an error of a motion court to duplicate an award of temporary maintenance by directing the husband to pay in accordance with the formula set forth in the guidelines and then adding an obligation that he pay the wife’s housing expenses as well.

By way of background, the legislature’s approach to temporary maintenance awards experienced a seismic change in 2010 when Domestic Relations Law § 236(B)(5-a) was signed into law, bringing with it a formula that must be used to determine the amount of support. Before it was passed, judges had much more leeway in ordering temporary maintenance. The statute, which is designed to create greater consistency, requires the court to explain any deviation that it makes from the result which is calculated using a specific formula. Rather than aiming merely to “tide over” the non-monied spouse, the new provision creates a substantial presumptive entitlement based upon a formula using a percentage of each spouse’s income.

Initially, many divorce lawyers were not happy about the new law, as they considered it to be both rigid and potentially inequitable.

When collaborative divorce was first developed, it was a process that involved two attorneys and their clients. The attorneys not only counseled and advised their clients about the law, but also about the financial and child-related issues that needed to be resolved. And they did their best to help with the emotional and communication issues that inevitably arose during the divorce process.

Collaborative attorneys eventually realized that while they were the best source of legal information and advice for their clients, this wasn’t necessarily the case when it came to financial issues, child development issues and communication issues. Instead, collaborative attorneys realized it made more sense to refer their clients to other professionals who had specialized training in these areas. And that’s when the team approach to collaborative divorce began.

Today the New York Association of Collaborative Professionals and other practice groups train financial professionals, divorce coaches and child specialists alongside lawyers in collaborative practice. As a result, the team approach to collaborative divorce has become more commonplace.

NPR reported this week that the divorce rate is on the rebound due to the fact that the economy is improving. Some of the reasons cited for this change are the fact that credit is getting somewhat easier to obtain, investment and retirement accounts are benefiting from the rise in the stock market and housing prices are no longer in free fall. I see all of these factors playing a role in my clients’ decisions to divorce. But another reason for the increase in cases is that many people have been waiting 2 or 3 years now for their financial situation to improve and they realize they cannot wait any longer. Regardless of whether the economic circumstances are ideal, they have decided to end their marriages. But these clients are not jumping into divorce blindly regardless of the financial consequences. They are ready to face the economic realities head on and figure out a way to allow them to separate from their spouse.

It is for this reason that I strongly recommend that my clients and their spouses hire a financial professional who is certified in divorce financial planning and/or who is certified in collaborative divorce. These professionals can work with one party or with the couple together to help them determine what asset and debt allocation makes the most sense and what support may need to be paid to assure that both parties are living as well as possible post-divorce. If clients to take the time to examine these issues in the divorce process, they have a better chance of achieving their ultimate goals of having more financial security and less emotional stress after the marriage is over.