Many who divorce cite financial woes as a contributing or even leading factor in the breakdown of the relationship. A recent study by Jeffrey Dew, a professor at Utah State University, supports these anecdotal comments.
Dew's survey-based research indicates that finance-related tensions are associated with an increased risk of divorce. Couples who reported they engaged in several disagreements about money each week were more than 40 percent more likely to divorce than couples who reported similar problems only a few times a month.
Somewhat unexpectedly then, in a troubled economy, a report from the National Marriage Project at the University of Virginia says that divorce rates have recently been dropping among married women. The report found that divorce rates fell in the first full year of the "Great Recession" - from 17.0 divorces per 1,000 married women in 2007 to 16.9 in 2008. The divorce rate was 17.3 per 1,000 married women in 2005.
Massachusetts has the lowest divorce rate in the United States, with only 1.8 divorces per 1,000 people in 2008 to 2009.
Potential Causes for Decline in Divorce Rates
W. Bradford Wilcox, director of the National Marriage Project, says that difficult times may foster family solidarity and encourage couples to stay together. When couples have less money for distractions, they are able to spend more quality time together and reconnect.
However, as in the Great Depression, the decline may be due at least in part to couples' decisions merely to postpone divorce due to money issues. Spouses may find the expense of going through a divorce proceeding too big of strain on their budgets. Additionally, spouses may feel they cannot bear the separate living, insurance and other costs following a divorce.
In particular, working-class men have absorbed 75 percent of job losses since 2007. While this "mancession," as it has been dubbed, may bind spouses together out of fear, it is also undercutting marriage. Research has found that men who work fewer hours than their wives are 61 percent less likely to report they are "very happy" in their marriage than those who work as many or more hours than their wives.
Divorcing Now Rather Than Later
Notwithstanding financial concerns, some couples may choose to divide (assets) and conquer (fears) now, rather than postponing divorce. There are some important considerations for these spouses as they attempt to arrive at fair and equitable divorce terms.
Financial Considerations
Contested divorces tend to cost more. To the extent couples are able to reach an agreement on all or most matters, they not only retain control over the terms of the divorce but they also can save themselves the time and expense often associated with courtroom litigation. Mediation, a procedure in which a neutral mediator helps the parties work out an equitable settlement, may also save some divorcing couples time and money.
Division of Property
Before reaching a final agreement, it is important for spouses to know their legal rights and also the financial and tax consequences of their decisions. One of the first steps to dividing assets is to take an accurate inventory of them. Couples should make a complete list of financial assets, including bank and retirement accounts, vehicles, jewelry, investments, property and business ownership interests.
As couples divide the assets, they should bear in mind that splitting similarly valued items does not necessarily create financial parity: while some assets carry tax burdens and generate ongoing liabilities, others continually grow in value.
The division of retirement accounts or pension funds may require a special court order. Each spouse should also understand the potential impact of a future decision to take early or late retirement.
Children and Financial Obligations
Child support determinations should clearly define which parent may claim the children as dependents for income tax purposes. Parents should also address medical and dental insurance and non-covered costs, the costs of extracurricular activities and summer camps, college funds, and any other considerations specific to the children's present or future needs.
Alimony/Spousal Support
When considering alimony or spousal support , after taking into account the reliability of the paying spouse's stream of income, some may want to consider other alternatives. Lump sum payments or the purchase of a lifetime annuity are two alternatives that can offer more security.
Contact an Attorney
Whether or not they have reached an agreement, each spouse should contact a family law attorney to advise them of their property interests and counsel them about support and custody matters. For uncontested divorces, attorneys can draft the written settlement agreements to reflect the agreement clearly and accurately. In a contested divorce case, attorneys can protect nonmarital property, preserve individual interests in marital property, and defend parental interests.
