Divorce may be difficult, even under the best of circumstances. And according to the National Marriage Project at the University of Virginia, historically, the number of filed divorces decreases during times of economic decline. Their study shows that among married Americans who were considering divorce or separation prior to the recession, 38% said the recession caused them to put aside or postpone their plans.
Deteriorating home prices, unemployment, increasing health care costs, declining values in investment and retirement accounts, the inability to pay off debt, and a need to band together in tough times may all add to the challenges of breaking up and splitting assets.
In addition, the cost of litigating a divorce may be increasing. According to a national survey conducted earlier this year by the National Law Journal and ALM Legal Intelligencer, the average partner in a family-law firm charges $295 per hour. This is an increase of 4.6% since 2009.
In my opinion, addressing the economic issues surrounding a divorce at the early stages of the divorce process may help alleviate some of the stress associated with divorce.
A Certified Divorce Financial Analyst (CDFA) is trained to understand the financial issues that surround divorce. Whether choosing litigation or engaging in various alternative methods of divorce these issues can be quantified and analyzed to determine if and how well an individual will be able to survive financially post divorce. The CDFA assembles a financial net worth statement that will give a clearer picture of the couple’s assets, liabilities and expenses. They can also assist the client and their attorney in understanding the various financial outcomes of pending decisions by creating personalized reports and graphs that illustrate the status, cash flow and net worth of both parties. This may help them to understand the short-term and long-term financial implications of alternative settlement proposals. This type of specialized financial analysis conducted early in the divorce procedure can help a couple reach a workable and fair settlement of their marital assets while saving time and money.
Donna Cheswick is an Assistant Vice President – Financial Consultant and Certified Divorce Financial Analyst, with BPU Investment Management Inc. She can be reached at 724-837-1130.
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