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Common Causes of Divorce
Author Jonathan Roeder Posted on

Understanding the Unexpected: Common Causes of Divorce and How to Anticipate Challenges in Marriage

There are many benefits to getting married and staying married. For example, wedded couples are less likely to be depressed, distressed, or suffer from substance abuse. Of course, no one enters a marriage thinking that they will ever get divorced, yet divorce rates remain high in this country.

One way you can anticipate challenges – or maybe even improve your chances of staying married – is to understand the causes of divorce. Learn more about the most common reasons cited for divorce from the skilled family law attorneys behind Draft My Legal Docs.

Lack of Family Support

The first several years of marriage are often the hardest. This is often when children enter the picture, and rearing newborns and toddlers can add to the stress of marriage. Many young married couples struggle to navigate those challenges, especially when they lack family support.

Family support can come in many forms. For example, having a parent come to watch the children can provide important relief for working parents. In addition, observing successful marriages in the family can be key; doing so can help young couples remember that courtship and dating do not have to end once they get married. Both circumstances can keep the romance in the relationship strong.

Without support from family –whether it be financial support, advice, childcare, or even a positive example – couples are more likely to get divorced.

Extramarital Affairs

An extramarital affair can quickly sever trust between two spouses. Before states adopted no-fault divorce laws, affairs and infidelity were among the few reasons someone could file for divorce. Given the role of marriage in child rearing, it is no surprise that an extramarital affair remains a leading reason cited for divorce in this country.

However, in many cases, by the time an affair happens, there is often already trouble in the relationship. Affairs may occur because one partner believes they are not getting the attention, respect, and intimacy that they would like at home.

A lack of compatibility

Lack of Compatibility

A lack of compatibility could mean one of many things. Compatibility is generally thought to mean the ability to work together and get along in a range of areas. Often, people who say they are compatible with their spouse share similar personality characteristics with them. Compatibility also refers to the ability to have a disagreement and work through those differences without escalating the situation.

Sometimes, it is only after tying the knot that one or both spouses realize that they are not fundamentally compatible as a couple.

Lack of Intimacy

Although a lack of intimacy is often a symptom of other underlying issues in a marriage, missing this crucial component of a marriage can lead to divorce. All it takes is one partner to withdraw from acts of physical intimacy. The other partner may grow resentful or seek intimacy outside of the marriage. With open communication and possibly therapy, couples may be able to work through this problem without it ruining their marriage.

Too Much Conflict

In a healthy marriage, occasional arguments are not uncommon. They are often considered a normal part of any relationship. However, when conflicts escalate to the point where they occur on a daily basis, the constant stress and strain of verbal or physical altercations can gradually erode the foundation of the marriage. Frequent conflicts may signal underlying issues, such as unresolved anger or communication problems.

One or both partners may come to the realization that the ongoing tension and discord are unsustainable. In some cases, underlying anger issues or other unresolved conflicts may become more apparent, leading one or both spouses to recognize that living apart may be preferable to the daily turmoil within the marriage. This realization can ultimately prompt the decision to pursue divorce.

Financial Stress

Money can’t solve all life’s problems, but it can make marriage more sustainable. The opposite is true as well, as financial stress can lead to arguments at home. In addition, when the household breadwinner is unable to provide for their family comfortably, they may turn those feelings of shame into more dangerous habits like drinking or verbal abuse.

Financial Stress

Financial stress makes planning for a brighter future more difficult, if not impossible. With no hope for improvement, many couples decide that divorce is the best option. Sometimes, those decisions are made in hopes of a better economic future.

Lack of Commitment

Marriage is regarded as one of the most significant commitments an individual can make in their lifetime. It is a journey filled with highs and lows, and few would claim that maintaining a marriage is easy. Most couples recognize that a successful marriage requires ongoing effort and dedication.

Each challenge that arises within a marriage presents an opportunity for growth and strengthening the marital bond. Couples who actively work on their relationship, communicate openly, and navigate obstacles together often emerge with a deeper connection and greater resilience.

Unfortunately, when one or both spouses lack the commitment or willingness to invest in the marriage, the relationship can deteriorate. Conflicts may go unresolved, trust may diminish, and emotional distance may grow. As the marital foundation weakens, the relationship may reach a point where continuing the marriage becomes untenable.

Parenting Differences

Once children come along, differences in parenting can cause division in the relationship. This could involve disagreements on discipline, education, values, or even fundamental parenting styles.

The resulting tension and lack of agreement on crucial parenting decisions can lead to communication breakdowns, resentment, and feelings of being unsupported. These conflicts may erode the marital bond and contribute to marital dissatisfaction, potentially leading to divorce.

Marrying Too Young

As we age, our values and expectations evolve. Someone who may have seemed like a lifelong partner at age 22 may be incompatible ten years later. Some spouses are able to grow together even as they grow in their own unique ways. Other married couples are less able to sustain their relationships as they grow as individuals.

Opposing Values or Morals

Most couples are aware of where they stand in their relationship with their partner when they get married. Still, seemingly minor differences over religion, politics, and other areas can become serious problems during marriage. In some cases, one or both spouses may evolve in their religious and moral views and beliefs.

Even when these differences did not seem like a serious problem at first, opposing values or differences in morality can gradually erode the bond that keeps a marriage together.

Substance Abuse

Substance abuse can be the root cause of a divorce, or it can lead to behaviors that ultimately make a marriage untenable. For instance, substance abuse can lead to financial stress, health issues, disengagement with one’s partner, and even abuse or neglect. Still other issues precipitated by substance abuse may include infidelity, parenting differences, and more.

Domestic Violence

Physical violence is unacceptable in any situation. Sadly, it can be a common occurrence that brings about the end of a marriage. The abuser may ultimately end up facing criminal charges for domestic violence. Spousal abuse can go on for years or longer before one partner is mentally and financially prepared to leave.

Keep in mind that domestic abuse need not be physical to negatively impact marriage and both partners. Emotional abuse can be extremely taxing on both physical and mental health. Furthermore, domestic abuse can also cause divorce when it occurs between a parent and a child. Remember, the National Domestic Abuse Hotline is available 24/7.

Pursuing Different Lifestyles

There are any number of reasons that someone may pursue a different lifestyle later in life. When those changes prove too drastic, the marriage can fall apart. Someone may realize they have hidden some part of themselves for too long. Or they may resent having to live a certain way just for the sake of their marriage.

Pursuing Different Lifestyles

Top Reasons People Marry

Understanding the causes of divorce is important for keeping a marriage healthy. It is also important to understand the reasons people marry in the first place.

When these main motivators disappear, marital strain can also occur:

  • Financial Security – There are many financial advantages to marriage. Tax savings, tax credits, lower overall costs, bundled services, and collective buying power are just a few of the benefits that can motivate someone to get married.
  • Companionship – Humans are social creatures who generally do not like being alone. Many people seek marriage as a way to have a companion to spend time with and socialize with.
  • Family – You do not have to be married to start a family, but getting married makes raising a family much more enjoyable and manageable. Many people enjoy the idea of a traditional marriage where both parents live together and raise children.
  • Emotional Security – Marriage can provide the reassurance and security you need so that the relationship is viable in the long term.
  • Medical Insurance – For someone with a serious illness or condition, medical insurance via a spouse’s plan can literally be a lifesaver.
  • Societal Pressures – The pressure to marry generally falls heavier on women than men, but both genders notice increased pressure as their peers find spouses and they don’t. Whether the pressure originates from church, family, or popular culture, getting married is an expected step for adults living in the United States.

Leading Causes of Divorce FAQs:

If you are considering divorcing your spouse or are in the process of going through a divorce, you are probably wondering how many people are going through the same process and why it occurred.

What Percentage of Marriages End in Divorce?

It is difficult to determine how many marriages end in divorce, especially because many divorces occur in second or third marriages. However, according to the CDC, around 22% of marriages end within the first five years. That number includes marriages that end in separation, divorce, or death. The percentage jumps to 58% over 20 years.

What Is the Top Cause of Divorce?

According to research, nearly three-quarters of participants listed a lack of commitment as the reason for their divorce. When one or both spouses are unwilling to work through difficult challenges, the marriage can crumble. A lack of commitment in the marriage can be a symptom of larger problems, such as incompatibility and other issues.

Why Do Most People Get Divorced?

Most people get divorced because they realize that their marriage is no longer tenable. This could be because they are fundamentally unhappy with their marriage, facing daily abuse by their spouse, or realize that they are simply not good life partners. Something sudden and upsetting, like an affair or drug abuse, can also upend a marriage. All of these reasons may contribute to a perceived lack of commitment.

Why Do People Get Divorced After 10 Years?

People who are able to stay married for ten or more years are often more likely to remain married. This is because many of the upfront challenges of marriage (balancing careers, child-rearing, learning to compromise) have subsided. Still, later adulthood can pose new challenges to marriage. One spouse may resent giving up their career or ambitions and find that their mid-life crisis leaves them questioning their marriage.

At What Age Is Someone Most Likely to Get Divorced?

The most common age at which someone is likely to get divorced for the first time is around 41 – just over 42 for men and just over 40 for women. This demonstrates a marked increase, as the most common age to get divorced was closer to 30 in the 1970s. The rise may be attributed to the rise in divorces after 50.

Learn More About How Draft My Legal Docs Can Help You in Court

Draft My Legal Docs combines the cost savings of DIY templates with the many benefits of working with a lawyer. You won’t have to pay high fees for our services, but you can trust that an attorney will draft and review every document created.

Divorce Documents

Online document generators may seem to offer similar services on the surface, but their templates are not case-specific; they may not even have the most current templates available. The family court system is continually adopting new guidelines, laws, and changes to the family code that can only be monitored by a skilled attorney. Draft My Legal Docs is operated by licensed attorneys who stay current with new laws as they change and evolve.

We are here to help you navigate the family court system confidently. By working with Draft My Legal Docs, you can benefit from expertly drafted documents reviewed by professional lawyers. To learn more about how Draft My Legal Docs can serve you, schedule a consultation today.

 

 

Resources:

  1. Divorce Statistics: How Many Marriages End in Divorce? (2016, May 17). Psych Central. https://psychcentral.com/health/the-myth-of-the-high-rate-of-divorce#first-year-of-marriage
  2. ‌NSFG – Listing D – Key Statistics from the National Survey of Family Growth. (2019, November 6). Www.cdc.gov.  https://www.cdc.gov/nchs/nsfg/key_statistics/d.htm#divorce
  3. ‌Scott, S. B., Rhoades, G. K., Stanley, S. M., Allen, E. S., & Markman, H. J. (2013). Reasons for divorce and recollections of premarital intervention: Implications for improving relationship education. Couple and Family Psychology: Research and Practice, 2(2), 131–145. https://doi.org/10.1037/a0032025
  4. ‌Gandhi, B. (2023, September 6). These are the top causes of divorce, according to a dating coach. TODAY.com.   https://www.today.com/health/causes-of-divorce-rcna103666
  5. ‌In What Year of Marriage is Divorce Most Common. (2020, November 26). Marriage Advice – Expert Marriage Tips & Advice. https://www.marriage.com/advice/divorce/what-year-of-marriage-is-divorce-most-common/
  6. ‌Median Age at First Divorce, 2020. (n.d.). Bowling Green State University. https://www.bgsu.edu/ncfmr/resources/data/family-profiles/julian-median-age-first-divorce-2020-fp-22-23.html
Is Collaborative Divorce the Right Choice?
Author Jonathan Roeder Posted on

Collaborative Divorce Mediation: Is it the Right Choice for You?

A collaborative divorce, or collaborative divorce meditation, is an excellent way to work through dissolving your marriage in a way that allows you to focus on working together privately. With collaborative divorce, dissolving your marriage doesn’t have to be contentious or drawn out in litigation.

Instead, a collaborative approach can help you get through divorce without the court’s interference for the bulk of the process. Here we will discuss the benefits of taking a unified approach to divorce, who collaborative divorce is suitable for, and what a collaborative divorce entails in the state of Arizona.

Who Should Consider a Collaborative Divorce?

A collaborative divorce is an excellent option for people who do not wish to engage in lengthy divorce proceedings through the court. Using a collaborative approach to your divorce will help you avoid hashing out your issues in court, which costs time, effort and money. With a collaborative divorce meditation, you can stay on top of the process and have your attorney assist you with the various legal aspects of ending your marriage.

If you want a divorce that focuses on team effort and leaves out the drawn-out legalities, a collaborative divorce is the way to go. You and your soon to be ex-spouse can work through mediation with the shared goal of parting ways in an amicable manner.

What Makes Collaborative Divorce a Good Option?

Collaborative divorce mediation is a good option for several key reasons. We’ve listed the most common reasons people choose collaborative divorce.

You Can Avoid Lengthy Litigation

This benefit has been discussed above, but it is important to stress that collaborative divorce mediation keeps your divorce proceedings in your hands. In traditional divorce proceedings, a judge presides over your divorce and steps in to make decisions if you and your former spouse are at a point of disagreement. While this process works in situations where the involved parties are experiencing difficulties settling issues, it is not necessarily applicable to couples who want to divide assets and settle custody issues on their own.

You’ll Experience Flexibility in Scheduling Negotiations

With mediation, you can schedule divorce negotiations around other important day-to-day needs like work and the children’s school hours. You and your team can decide on a timeline for the divorce and work to resolve issues in a manner that helps everyone involved save precious time. Traditional litigation considers availability of the courts first and foremost, which can lead to a divorce that takes significantly longer to finalize.

You’ll Save Money on Court Fees

SSave Money on Court Fees

If you have a complex case where you need to divide businesses, split valuable assets, and sort out child custody, divorce litigation can become very expensive. Through mediation, the process of settling issues pertaining to children and finances can be much more affordable. Saving money in a time where you’re going through such a drastic life change can have a significant impact on your financial standing and should not be overlooked. Collaborative divorce mediation can achieve the same results while preventing you from spending thousands of dollars.

Collaborative Divorce Can Be Less Stressful For Children

Collaborative divorce mediation can prove much less stressful for children, especially if they would have been required to appear in a courtroom in front of a judge. In court proceedings where divorcing parents aren’t communicating with each other to make important decisions regarding the well-being of the children, children may need to meet with court officials. In mediation, both parents work together with their attorneys and can request the assistance of child specialists, communication liaisons and other professionals to maintain a healthy and productive dialogue about childcare needs.

When couples are divorcing, the idea of their child sitting in a courtroom often isn’t considered until discussion has devolved to the point of litigation. Fortunately if you are filing for divorce in Arizona and looking to do so via collaborative mediation, you can avoid this possibility. Settling your divorce and child custody arrangement through mediation can be a more gentle experience for the entire family.

Collaborative Divorce Helps Keep Your Divorce a Private Matter

In collaborative mediation, you can consult with legal representatives the same as you would in traditional proceedings. You have the added benefit of being able to ask questions, challenge decisions and work through points of disagreement yourself instead of relying on a judge. While your efforts are collaborative, your attorney will still serve to protect your rights and work in your best interest. Having legal counsel in your corner ensures you cover your needs in the process of dissolving your marriage.

What Issues Are Covered in a Collaborative Divorce?

Collaborative Divorce

In a collaborative divorce, mediation allows for negotiation between parties to reach satisfactory resolutions. Unlike traditional litigation, divorcing spouses rely on their attorney team and the mediator to help them come to agreements on all the issues usually covered in courtroom divorces. The most common issues you can expect your attorney and mediation team to focus on are as follows.

Division of Assets & Property

The division of assets and other property is a highly contested and complex divorce matter. Many couples, even those who are not interested in fighting in court, struggle to comb through the details of asset division effectively. With collaborative divorce mediation, this process is made smoother with the help of your attorney and a financial professional who has the expertise to settle property division issues. Your team will need the full cooperation of you and your spouse to accurately divide your assets, property, and finances.

Spousal Maintenance

With the help of your collaborative divorce attorney and your financial professional, you and your spouse will decide whether spousal support is warranted and determine the details of the arrangement. To successfully negotiate spousal support, you and your spouse must provide accurate financial information so the professionals can make a determination regarding financial support. Once an agreement is reached, a support document is created and both parties must honor the agreement. The spouse who is responsible for providing spousal support will then be required to assist the other with essential financial needs for the time specified.

Child Custody

Child custody (now referred to as legal decision-making) is often the most difficult part of a divorce to settle. When children are involved, emotions run high. As a result, power struggles over legal and physical custody can drag divorces on for extended periods of time. In a collaborative divorce process, divorcing spouses and their team openly communicate to negotiate the needs and desires of each party regarding childcare and important decisions. Like all other aspects of the divorce, spouses are encouraged to talk out issues so they can come to an agreement that works for both parties and serves the best interest of the child.

With the help of a collaborative team of professionals, divorcing spouses can develop a parenting plan that helps them decide how to communicate about childcare, how to schedule physical custody, and what they will do when critical issues regarding the child’s education, shelter, medical care and socialization arise. The parenting plan can then be approved and finalized by a family court judge.

Pets and Pet Care

A beloved pet is also an important member of the family that must be taken into consideration when spouses are divorcing. Decisions often revolve around which spouse has a stronger attachment to the pet or which spouse does most of the daily pet care. Still, it can be difficult to decide who will keep the pet moving forward. If an agreement over pet care and costs cannot be easily reached, a collaborative team can help decide how to share pet care and costs.

What Is the Cost of Filing For Collaborative Divorce in AZ?

The costs of divorce litigation can be very expensive. Attorney fees alone can range from tens of thousands of dollars to even a hundred thousand in more complex cases. While each divorce case differs in complexity, divorcing spouses who opt for a collaborative divorce process find themselves spending a fraction of the costs associated with traditional litigation.

Collaborative divorce can cost as little as a few thousand dollars. You will typically pay an attorney an hourly rate for the time they spend working on your case, but you are only billed for the time your mediator spends in mediation. Furthermore with the time saved in mediation the entire divorce process is less taxing on spouses, children, and even pets.

We Can Help You During Your Divorce

Help During Your Divorce

Divorce is a common but serious process that entails a great deal of decision-making and compromise. If you are filing for divorce in Arizona via collaborative divorce mediation, it is essential to prepare for the steps required to settle matters in a way that benefits the entire family.

Our legal experts are available to help you stay in control of the divorce process and effectively work through important issues to reach solutions that preserve communication and foster harmony. Count on us to assist with the creation of documents that will outline the essential aspects of your divorce. Together, we can ensure all your most important needs are thoroughly addressed and settled.

*Editor’s Note: This article was originally published Mar 30, 2018 and has been updated September 14, 2022.

How Financially Prepare for AZ Divorce
Author Jonathan Roeder Posted on

How to Prepare Finances for a Divorce in AZ

A handful of important considerations beckon your attention throughout the divorce process. And, being prepared can help ensure your assets stay protected.

How to Make Financial Moves Before a Divorce

If you or your partner have recently filed for divorce in Arizona, there are a few things that you should try to do as quickly as possible.

Choose a Lawyer that’s Right for You

One of the most important steps you can take before beginning a divorce is hiring an attorney you can trust. Divorce can be an intimidating process that is already emotional and stressful, and feeling unsure how to proceed can create even more anxiety.

By hiring an experienced AZ attorney, you will receive advice and assistance throughout your divorce, including formidable representation in court. A divorce lawyer is experienced with all the issues that may occur during divorce, including financial considerations. If you and your soon-to-be-ex-spouse differ regarding the division of assets, an attorney can help you handle financial concerns in a way that preserves your future.

Organize and Identify Your Assets

Organize Records

Identifying your assets also helps if you think your partner may try to sell or hide any community assets in an attempt to avoid dividing them with you. Bank statements, credit card statements, mortgage statements, retirement accounts, life insurance policies, and any physical assets or properties should all be accounted for. It is critical to know what you have before you begin the property division process.

Estimate the Cost of Your Divorce

Unfortunately, divorce is rarely a cheap process. Many people go into divorce not expecting its high price tag and are therefore uncertain what to do with money before a divorce begins. Whether you choose mediation to settle various aspects of your divorce out of court or engage in lengthy litigation to make decisions, divorce expenses can add up quickly. Since every divorce is different, it isn’t easy to determine the potential cost of your case. However, estimating attorney fees, moving costs, court fees, and regular monthly expenses can help to give you a better idea of how to manage your money moving forward.

Avoid Making Major Financial Decisions

Of course, divorcing is itself a major financial decision that will impact your finances. However, other major decisions, like changing your beneficiaries, closing accounts, and transferring assets before a divorce can hurt you during the divorce process. These things will be handled legally once the divorce is underway and the division of assets has begun. If you make these moves too soon, you may risk contempt of court or lose your assets to your soon-to-be-ex.

How to Prepare Finances for an Arizona Divorce

During your divorce, division of assets will result in property ownership changes, in addition to your regular and divorce-related expenses. Here are some tips for handling your finances during the chaos of a divorce.

Close Joint Accounts

Close Joint Accounts

Once you have begun the divorce process, it’s time to start closing your joint accounts. Often, bank accounts have both partners’ names, and funds will have to be transferred individually to new accounts. Joint credit cards must be canceled through the creditor, and you’ll have to open your own new credit account.

Closing joint accounts can help prevent your ex-spouse from misusing funds before the divorce is finalized. It’s important that you open a new checking and savings account in your own name and arrange income for deposits and debits for expenses to be handled through the new account. You should also keep documentation regarding when you closed your joint accounts and began your own.

Get An Asset Evaluation

Your assets are important. Whether you’re dealing with expensive collectible items, a shared family home, or your retirement fund, evaluating your assets is critical for a fair property division process. By hiring a professional to evaluate your and your ex-partner’s assets, you can ensure that the correct value is placed on each asset and that they are fairly divided during the divorce. A professional asset evaluation should be done as soon as possible to avoid delays in your divorce and prevent your partner from hiding assets.

Gather Financial Documentation

To properly handle your finances and ensure that property division occurs fairly during your divorce, you will need to collect a great deal of financial documentation. If you have not already done so prior to beginning your divorce, gather bank statements and credit card statements to help to give your lawyers and the court a better idea of how finances were used throughout your marriage. Checking and savings statements, pay stubs, credit card statements, bills, loan agreements, and income tax returns are all critical documentation needed during a divorce. These documents can help the court understand how money was handled as well as its source, such as the individual incomes of each partner.

Maintain Your Individual Credit

Your credit score plays a crucial role in many areas of your life, including your financial health. Despite the difficulties of your divorce, it’s important to maintain your credit. Unfortunately, people often complete a divorce with weak credit due to mounting expenses, their partner’s spending issues, and many other factors. It’s essential to continue building your individual credit so that you can avoid issues like higher financing rates or difficulty renting or purchasing a new property.

Don’t Forget About Insurance Policies

Insurance policies can become a complex financial task because they often affect other important aspects of your life, many of which were shared with your partner. For example, most life insurance policies will require beneficiary changes if you wish to remove your former spouse. Car insurance policies may also need to be changed if they were previously shared by both spouses or if vehicle ownership has changed.

How Can I Afford to Live on My Own After Divorce?

During a divorce, you may experience multiple different housing situations, all of which present different financial concerns. So, how does this work?

Home Sale

One Spouse Buys Out the Other

Since a home is a physical asset that cannot be split unless sold, the person remaining in the family home must often “buy out” the other spouse. This can be done via a cash out finance or forfeiture of an asset or assets of equal value. With these assets or funds from the cash out refinance in hand, the other spouse can afford a new living situation. The title will need to be transferred to the remaining spouse, and all ownership and mortgage documents should be solely under that spouse’s name.

Spouses Agree to Sell the Home

Another option is selling the family home. Sometimes, this is the best option for couples who do not have children, or cases where neither partner feels they have the finances to maintain the home on their own. With the help of a real estate agent and your lawyer, you and your partner can sell your shared home and then split the proceeds fairly. If you and your partner can’t afford to keep the home or are worried about selling it in the current market, you may also agree to rent the house to a third party. When this happens, proceeds can be split between both partners.

Other Circumstances

Unfortunately, the above options may not be available for all couples, especially if they owe more for the home than the home’s current market value. In some cases, if neither you or your partner wants to remain in the home, or neither of you feel you can afford to stay there, you may have to agree to sell the home at a loss. In more severe circumstances, foreclosure may be necessary. Moving forward, the assets retained after the divorce and your own efforts to maintain your credit should help you find a new residence you can afford.

Protect Yourself and Prepare Your Finances During a Divorce

We provide affordable legal services for any individual involved in or looking to initiate a family or divorce law case. We offer guidance as well as our professional expertise and knowledge of the law. We are located in the heart of Phoenix, but our services are digital, which allows us to help individuals throughout the state.

 

*Editor’s Note: This article was originally published March 21, 2018 and has been rewritten August 23, 2022.

Wrecking Your Finance
Author Jonathan Roeder Posted on

How To Keep A Divorce From Wrecking Your Finances

By Laurence Kotlikoff, Next Avenue Contributor 

(Kotlikoff also contributes to Forbes. His posts can be found here.) 

Divorce is always sad, but when it turns ugly, it’s terrible. You may remember The War of the Roses, the dark comedy where Kathleen Turner and Michael Douglas start out as a perfect couple and end up destroying their possessions — including their luxurious house and cars — because they can’t agree on who gets what. That movie is unfortunately hitting home for plenty of boomers and Gen X’ers. According to a recent survey by Allianz Life Insurance, two thirds of divorced women feel their divorce created a financial crisis.

Many of my friends have gone to divorce war, but unlike Turner and Douglas, they destroyed their finances (by paying steep legal fees), not their possessions. Divorce doesn’t have to be as financially painful as it so often is, though.

Why Divorce Turns Into War

What drives divorce wars? My hunch is that many are driven by very different assessments by spouses of the impact of their proposed settlements. For example, a husband may think his settlement proposal is incredibly generous while his wife thinks it’s miserably cheap. Without a neutral measurement stick, their fight — with the lawyers’ meters running — can go on and on.

s an economist, I’d say that this is where economics can help couples. Its math and computer algorithms can figure out precisely how much each spouse will get to spend now and in the future under any given divorce settlement. And this analysis can take into account all relevant factors, including the division of assets, alimony and child support, child custody and the disposition of the marital home.

How do I know? My company just released a new software tooldesigned to limit divorce wars (full disclosure: I derive no income from it). It calculates each spouse’s living standard under any proposed divorce settlement.

John and Sally’s Equitable Divorce

Let me illustrate this new technology:

Take John and Sally Doe, both 50, who are untying the knot after 25 years. John earns $200,000; Sally earns $40,000. John and his employer both contribute $6,000 a year to his 401(k). Sally and her employer both contribute $3,000 to hers. John and Sally plan to retire at 65. The couple has one child, Sam, 10. Sam will spend 80% of his time with Sally and 20% with John. John will cover Sam’s college expenses. The couple own a $450,000 house with a $90,000 mortgage. John proposes that Sally live in their house for eight years, while he picks up three-quarters of the housing cost. Meanwhile, John will buy a condo for $200,000. Sally will buy the same-priced condo when they sell their house, sharing the proceeds 50/50. John also proposes dividing the couple’s $200,000 in regular assets and $1 million in retirement assets in proportion to their labor earnings.

John wants to be fair. He figures that paying for most of Sally’s and Sam’s housing for the next eight years, covering Sam’s college expenses and housing and feeding Sam one-fifth of the time is highly generous. He also believes his and Sally’s living standards will be pretty similar once his much higher tax payments are factored in. So John proposes no alimony or child support.

Is John right? Will he and Sally be able to spend roughly the same amount over the rest of their days?

No, he’s wrong. But by playing around with the numbers and the software they can arrive at an agreement that works for both of them.

John’s proposed settlement lets him spend $83,215 annually and Sally spend $23,353 annually (measured in today’s dollars) after covering all housing costs and taxes. There are lots of reasons for this big differential, including John’s higher salary, his large asset share and his receipt of higher Social Security benefits.

When Sally points out the large spending (living standard) difference, John offers to split all assets 50/50. Now John’s and Sally’s annual spending amounts become $73,891 and $35,757, respectively.

Sally, who sacrificed her career to put John through law school and raise Sam, digs in her heels. “John, you need to pay alimony and child support,” she says. John agrees to $25,000-a-year in child support until Sam goes to college. Sally runs the computer program again and finds that John’s annual spending would now be $68,783 and hers would be $41,158.

Sally says, “John, sorry, but you wouldn’t be making five times my salary if it weren’t for me. There is no reason I should have a lower living standard going forward. If you pay me $20,555 each year in alimony and agree to the other things you offered, we’ll both get to spend the same amount each year: $54,836.”

John thinks this over and then counters with a $10,000 annual alimony payment, pointing out that his job is far more demanding than Sally’s. Sally, upon reflection, decides this is reasonable and the two hire a single attorney for one hour to draw up the agreement. Sally and John used economics to save their divorce.

How to Divorce Fairly

Couples don’t have to use this software to come up with equitable divorce agreements. You can also get a rough handle on your relative spending levels by comparing each spouse’s disposable lifetime resources.

To arrive at this number, you’d start by calculating your lifetime resources (the present value (how much a future sum of money is worth today) of your future labor, Social Security and other income including alimony and child support plus your current net worth. Next, you’d subtract the present value of your projected taxes, housing costs, expenditures on children and other expenses including alimony and child support payments. The difference is your spendable resources.

Do this for your spouse, too, and then divide by each spouse’s maximum remaining lifespan (use a calculator like this one) to find what each spouse will be able to spend annually. This is a rough calculation primarily because you’ll need to guesstimate your taxes and may mis-estimate your Social Security benefits, since they may be different in the future than what you expect today.

Source: www.forbes.com “https://www.forbes.com/sites/cdw/2017/09/21/three-organizing-principles-for-digital-transformation/#1900a7504da3”, Laurence Kotlikoff, 5/31/2017.

CHILDREN FROM CONFLICT
Author Jonathan Roeder Posted on

9 Tips for Protecting Children from Conflict during Divorce

It’s impossible to avoid conflict completely, but you can learn to control it. Here are nine useful tips for reducing the harmful effects of conflict during and after divorce.

There are several things parents can do to protect their children from conflict and reduce the harmful effects of long-term conflict during and after divorce. Some solutions require the aid of others, including the court. A parenting coordinator can help work out a plan as well as reduce conflict between co-parents.

1. Remove the Cause. Obviously, this is the best course of action, but it may require counseling or therapy. You need to examine your own role in feeding conflict; if there’s nothing you can do to end the dispute, you need to structure your life to decrease the violence. You should avoid fighting and playing mind-games. Children copy their parents’ behavior: they can become aggressive and show poor control of emotions.

2. Learn New Skills. Often, just going to a class will motivate parents. They will learn about the harmful effects of conflict. Hopefully, they’ll want to change – but to change, they must learn new skills. They must learn how to communicate without causing anger and how to listen to what is being said without judging. Parents need to work together and cooperate for the child’s sake. Books or videos about divorce and parenting can also help, and parenting skill classes are offered in many communities. These skills will help with many aspects of raising children post-divorce.

3. Keep Children Out of the Middle. Parents need to keep their child out of their disputes. Being caught in the middle between Mom and Dad is very stressful for children: the most powerful reason for a child to be maladjusted is conflict between the parents. Parental disagreements cause stress and suffering in a child; children often emerge in good shape from low-conflict break-ups, and they do better than those in an intact family with high conflict. Parents in conflict are poor role models, inconsistent with discipline, and inattentive – all of which creates stress for their children. Negative emotions between co-parents are carried over into their interactions with their children. After the conflict, parents are suffering, too; involvement with their child decreases and they cannot respond to their child’s emotional needs.

4. Control Your Emotions. Many parents go through regular cycles of emotion, from conflict to detachment. Feelings of anger, frustration, and resentment come and go – as do sadness, loneliness, and despair. Feelings of love, anger, and sadness have different effects, and some parents get “stuck” in one of these three feelings. Parents stuck in anger may endlessly seek revenge; those stuck in love may continue to hope to reconcile; and those stuck in sadness may become depressed, blaming themselves for all of the problems of the marriage. Parents need to learn to use non-violent language; most people respond well when given a positive message (something to do) and poorly when given a negative message (not to do something). Nonviolent Communication, by Marshall Rosenberg, explains this strategy (see the Center for Nonviolent Communication at www.cnvc.org). Good communication skills enable parents to react less emotionally in tense situations.

5. Prepare for Long-Term Conflict. Disputes continue for a long time post-divorce for most families, so parents should develop a plan that shields the child from conflict. The child will benefit if kept out of parents’ angry arguments. Co-parents should work hard to maintain their own and the other parent’s bond with the child, and they need to accept each other’s different values and parenting styles.

6. Contain Your Anger. Being cordial and formal will help keep your emotions in check. High conflict is usually temporary, so it is best not to decrease the child’s access to the other parent; it is more harmful for a child to lose a relationship with a parent than it is for them to be exposed to conflict for a short period of time. Decreasing contact between one parent and the child can lead to complete loss of contact over time, and children never get over the loss of a parent relationship – even as adults. There are good online programs that can help, such as Children in the Middle (www.divorce-education.com); parents can also work with a therapist or counselor. Mediators can also help reduce conflict by teaching parents to find ways to cooperate and agree.

7. Children as a Cause of Conflict. Sometimes, a child can make the fighting between parents worse. If a child has serious behavior problems or emotional problems, it adds to the burdens of the parents. If parents have trouble handling these issues, conflicts can arise or be aggravated. Of course, the child’s problems may be caused by the break-up or by the parents’ conflict; it can be difficult to know just what is causing what. The best solution is for the parents to agree on how to deal with the child’s problems: they need to be consistent across households, and they should support each other in front of the children.

8. Avoid Loyalty Conflicts. Loyalty conflicts, where a child feels pressure to choose sides, are the most damaging aspect of parental conflict. Most parents do not think they put their child in the middle of their dispute, but children say that they do. Some parents criticize the child for not hating their other parent, or act hurt when the child wants to be with their other parent. A child may not be allowed to talk about the other parent or to bring things back from the other house. The child may be quizzed about time spent with his/her other parent or about the other parent’s personal life.

A child will try to resolve loyalty conflicts in several ways, including:

  • having a separate but equal connection with each parent
  • trying to get the parents to be nice to each other
  • acting out, getting into trouble, or getting sick
  • becoming angels
  • retreating from both parents and turning to their peers
  • seeking comfort in alcohol, drugs, or risky sex.

Being caught in the middle is too great a burden for most children. The video, Children in the Middle, teaches parents to reduce the number of loyalty conflicts and the number of times the child is exposed to their arguments. The child learns to speak up when caught in the middle of parental disputes.

9. Arguing Constructively. It is impossible to avoid conflict completely, but you can learn to control it. Controlled conflict often leads to positive, constructive changes. Parents can learn to manage conflict, learn to compromise, and become more effective parents. When they do this, their child’s behavior improves.

Source: http://www.divorcemag.com, “http://www.divorcemag.com/articles/protecting-children-from-conflict”, Donald A. Gordon (Ph.D.) and Jack Arbuthnot (Ph.D.), Updated: November 12, 2015.
Tax Invoices
Author Jonathan Roeder Posted on

Effects of Taxes on Divorce Negotiations in 2018

With the passing of the U.S. Tax Cuts and Jobs Act of 2017, it is even more important than ever to make sure you’re taking taxes into account when you’re negotiating your settlement. There are several changes to the law, but the main ones that you should be paying particularly close attention to as you negotiate a divorce agreement are as follows:

1.     Alimony payments made by a former spouse will no longer be tax deductible for the payor. This is going to have the biggest effect on divorce negotiations.

a.     Until the end of 2018

i.     The payor of alimony is able to deduct that amount against his/her taxes. What  that means, is that whatever the alimony amount is, in effect it’s less for the payor once you take into account the tax deduction.

ii.     The recipient will have to pay taxes on the alimony which is treated as income. Typically, tax rates for the recipient are lower than the payor thus making it a win/win for both parties.

b.     Beginning in 2019

i.     Alimony payments will no longer be tax deductible to the payor.

ii.     The recipient not be taxed on the alimony received as income.

2.     The loan amount on which mortgage interest can be deducted has been reduced to $750k from $1m (not for existing home mortgages only new ones).

a.     If you’re renegotiating your mortgage because the home is being transferred into your spouse’s name, that will affect your taxes.

b.     If you’re looking to move and take out a new mortgage greater than $750k, again, you will feel the effects.

3.     Interest on Home equity loans is no longer tax deductible.

4.     The deduction of your State and Local taxes against Federal Income taxes has been reduced to $10k.

This is a very simplified version of the changes. Make sure you should check with your CPA or Certified Divorce Financial Analyst to help you accurately plan for the tax consequences.

Source:https://thedivorcierge.com “https://thedivorcierge.com/2018/01/effects-taxes-divorce-negotiations-2018/”, Karen Bigman, January, 24, 2018.

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