Most Couples are Unprepared for the Financial Implications of Divorce
If you are facing a divorce, take great care. You might not be ready for the complicated process and financial challenges that it can throw at you.
You are likely to make hasty decisions or react too quickly, particularly where money is concerned. As a result you could face having to deal with a divorce that turns ugly and that could hurt you for a long time to come.
Read More »Divorce can be a painful life change, says Catherine Shanahan, a certified divorce financial analyst and co-founder of My Divorce Solution. It usually catches people at a time when they are particularly vulnerable to making emotional decisions in the heat of the moment..
Too often couples are forced into making decisions out of anxiety or fear, Shanahan adds.
The results can be devastating financially.
Confirmed by survey
The belief that most married people are not ready for the financial implications of divorce has been confirmed in a new survey conducted by My Divorce Solution.
In the poll:
• Fewer than one out of three respondents said they would be ready to take on the monetary responsibilities that divorce imposes on people.
• Respondents were unsure to whom they should turn when considering divorce; the choice of consulting a marriage counselor and the choice of hiring an attorney tied at 38 percent. Fewer than 6 percent of those polled mentioned a financial adviser or an accountant as a priority.
• A third of respondents said an attorney is required during the whole divorce process. (Attorneys are needed only for certain aspects of the process.)
• Almost half of all respondents said they believed each spouse would spend only $5,000 to $10,000 during a divorce; a remaining third suggested the figure would be $10,000 to $25,000. (In reality, the average cost for a divorce nationally is $15,000. The figure is usually much higher for a contested divorce.)
• Three-quarters of those polled said they believe that people remain in unhealthy marriages because they are unaware of the monetary impact of divorce.
• Almost nine in every 10 respondents said people decide about divorce based on the belief that it would harm their children.
Assistance is available
Help is at hand, however. Services are available at affordable prices that can help with the complicated process that usually accompanies a divorce. Many of the services now available are provided online using today’s technology.
About half of all American marriages end in divorce, which is a $50 billion business in the United States, but few married people are unsure to whom they would turn should they face divorce proceedings, Shanahan says, adding that My Divorce Solution offers online classes that help couples to navigate the divorce process.
People too often are unaware of how much a divorce really costs, says Karen Chellew, legal liaison specialist and co-founder of My Divorce Solution. They do not realize how complicated it can be to evaluate and decide on assets in the marriage while going through a divorce.
Being clear on finances can make a situation that is tough a little better, particularly for children and family, she adds.
Consult professionals
When couples exchange marriage vows they likely are not considering the possibility of divorce, says Merriweather Mulé, a certified divorce financial analyst.
When life throws such an unanticipated event at couples, however, it is important that they consult a team of professionals who will stand by their side in finding their way through a time that can be challenging, she says. They will be helped to work toward a satisfactory settlement that will be fair to both parties.
System is outdated
The legal system is confusing, outdated, and encourages hostility, says Erin Levine, CEO of Hello Divorce, which says it provides affordable, easy-to-understand, and accessible legal services that are based on software.
No one should have to go bankrupt because of divorce, Levine says. Also, no one should remain in a marriage that is unhealthy and unhappy because they cannot afford to be divorced.
Research has shown that children as well as adults fare better after divorce when there is less uncertainty and conflict about relationships or finances, she adds.
Hello Divorce has simplified the process of divorce by using technology to provide an experience at every stage of the process that is effortless, says Jack Newton, CEO and founder of legal technology company Clio.
Joseph Schieffer, CEO of A2J Tech, which builds technology with the aim of improving access to justice, says his parents were divorced when he was a child. A platform such as that offered by Hello Divorce would have helped them in handling the divorce process and reaching an outcome that would be fair and that they could have afforded, he says.
My Divorce Solution provides couples and individuals with a straightforward document that will help them make well-based decisions for their future, Shanahan says. The document can serve as a blueprint to help those considering divorce to be clear on the financial implications.
