FABLE #1 – A 50/50 split is always a fair division of the assets.
FACT – If a spouse put his/her career on hold or left the career world to care for children, a 50/50 split may not be fair. Typically, once children are born a couple will decide that the lower income earner should be the one to stay home with the children. This is usually the woman. This makes economic sense because the couple is investing in the career of the higher income earner assuming that this investment will pay off in the future.
After a divorce, the spouse who put their career on hold no longer benefits from the investment. The other spouse continues to receive this benefit. Career benefits include: Higher earning potential, health/dental/life insurance, vacation/sick pay, pension plans, stock options, and continuing education and social security/unemployment benefits. The non-employed spouse should receive compensation for the career assets that her ex-spouse will continue to receive. Review the Case Study on our web site www.getasmartdivorce.com for more information.
FABLE #2 – Any problems children experience as a result of divorce are not long-lasting and they recover quickly.
FACT – Research shows that 2/3 of the children from families of divorce suffer problems ranging from low self-esteem to serious depression. Some children never recover from these problems (Source: Center for Divorce Education). Divorce increases the risk of interpersonal problems in children. There is evidence from both small and large qualitative studies and from large-scale, long-term empirical studies that many of these problems are long- lasting. Children that come from divorced homes are more likely to divorce. A major reason for this is that children learn about marital commitment or permanence by observing their parents.
FABLE #3 – Divorce is no big deal. Lots of people get divorced and manage just fine.
FACT – Experts agree divorce is second only to the death of a spouse as the most emotionally traumatic lifetime event. Experts agree that the emotional upheaval lasts at least two years.
The financial implications of divorce can be just as devastating as the emotional issues and the fourth most common reason for bankruptcy. Divorce is the most common reason why women are thrust into a life of poverty. After a divorce, the standard of living of women decreases, on average 27%, while a man’s increases 10% (source: Richard Peterson – Social Science Research Council).
FABLE #4 – Women don’t need to worry about getting alimony because most get remarried.
FACT – Fewer women tend to remarry than men. Studies show that 54% of women remarry within 5 years. Research has also shown that women tend to live longer than men and are therefore at a higher risk of outliving their retirement savings. The U.S. has the greatest percentage of elderly women in poverty of all the major industrialized nations (Source: Business and Professional Women’s Foundation).
If a mother re-enters the job market after several years, she will probably be starting over at entry-level jobs regardless of her prior experience or education. These entry-level jobs may barely cover the cost of child care and her most basic needs. Having a decent quality of life and saving for retirement may not be possible without alimony. These facts, combined with a woman’s lower earning power demonstrate the need for women to consider alimony.
Believing these fables can undermine your divorce.
Sandy Arons, MBA, CDFA™, CFDP, CDFS is the founder of Arons & Associates Divorce Planning, where they specialize in the financial and tax issues of divorce. They encourage you to take the time to understand the numbers before you sign the final divorce paperwork, educate you so you can make informed choices, and secure your future and your children’s future. Don’t just get a divorce. Get a smart divorce. They can be reached at (615) 376-8204
For more tips from divorce professionals, visit www.divorcemag.com/articles/divorce-tips-from-professionals.