I Am Getting Divorced : What Are Some Main Financial Concerns
So you have now decided to divorce. You know it will be painful & scary, but you believe the time is right to have a single life. Financial vulnerability and risks are inevitable.
Every year, approximately three million men and women head down the emotional and financial path of divorce. Following a divorce the cost is usually 25-50% more to maintain your pre-divorce lifestyle. A single household becomes twice as expensive as each spouse losses the benefit of the other spouses income. Economic discrimination due to gender gaps place additional financial burdens on women. A woman’s standard of living may drop 27% while a man’s standard of living may increase 10%!
Now start with the financial basics in surviving your divorce! What are the basics?
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A secure place to live
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Create little or no debt
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Protect retirement assets or income
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Use of liquid money or assets
The most important of these basics is Liquid money! You will need money to find a place to live and hire an attorney. You will also need money to pay your expenses during your divorce. Liquidity will definitely come in handy and enhance your position in the proceedings.
What about Debts? If possible pay off your debts now. The uses of savings or assets you can liquidate are the cleanest methods. Many divorced people find themselves responsible for their EX’s portion of debt since the exiting spouse refuses to pay. Legally, you may be responsible if your ex-spouse does not pay. Try to start your new life free of debt and with a new sense of self confidence!
What about Cash Issues and Retirement Assets in a divorce? If you and your spouse have retirement savings, each of you will probably be entitled to a one-half share or a portion based on a fixed ration of the number of years married and number of years of investing. This money could be kept for retirement or used to repay other current expenses or debts. Make sure you examine prospective tax treatment to avoid the 10% penalty on early withdrawal by the IRS.
Some tax questions to know about:
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Are spousal maintenance payments tax deductible?
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Who will be able to claim Head of Household status?
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Who gets the tax emption for the kids?
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Is child support non-deductible?
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Which Attorney fees are tax deductible?
Always remember to “Look at the big picture”. Keep your focus on finances and parenting. If you need help from smart professions, as your attorney, accountant, or mental-health professional, get it now! They will help you and your family with focus, objectivity and a long-term vision that is very difficult for you during this tumultuous time in your life. Now you need to be able to articulate you needs and goals for the future.
Do not forget! This time too shall pass and you may be, with planning, better than ever in the future!
Boomers And Family Relationships: Going on 60+ Years Young!
This year the Baby Boomer Generation is turning 65 and is redefining: “What is Old” as “We are the Upper Middle Age and Damn Proud of it! ” This proud group of 50’s and 60’s born babies have never stood still in the past and are not about to start doing so now!
Baby Boomers have always been an age group phenomenon associated with rejection of and redefinition of society‘s traditional values. Since most boomers in the United States grew up in a time of financial growth and affluence, they are considered the healthiest and wealthiest generation yet with control of over 80% of all personal financial assets and over 50% of all discretionary spending dollars. As Boomers grow older they expect the world to improve for the better and will seek changes in society’s traditional values to meet demand for change as they did in their youth.
One coming change will involve family relationships in the context of marriage, divorce, and cohabitation. Boomers have always been known as the “Individual Freedom” generation. Boomers have redefined old age today as not beginning until age 72+ (2009 Pew Survey). Boomers are 70% more likely to believe that the main purpose of marriage is mutual happiness and fulfillment rather than primarily child rearing, and are ironically less accepting of same-sex couples raising children, unmarried couples living together, and other non- traditional arrangements (2010 Pew Survey).
With longer life spans and growing acceptability of divorce, the Boomer divorce rate has tripled over their parent’s generation. Sixty-Six percent say divorce is preferable to an unhappy marriage (2010 Pew Survey) and an AARP study of boomers found that two-thirds (2/3) of divorces were initiated by the woman to the surprise of her male partner. A study by the Office of National Statistics indicates the US divorce rate has dropped, except in the 60+ age group. Times are “still a changing”, and yet the 2010 Decline of Marriage Pew Survey indicates 76% of all Baby Boomers today feel their family is “the most important element of their lives!”
Texas Child Abuse and Family Violence
The Texas Family Code defines Family Violence as an act by a member of the family or household against another member that is intended to result in physical harm, bodily injury, assault, or a threat on a family member in danger of imminent physical harm. This abuse is defined as physical injury that results in substantial harm or genuine threat of sexual, intercourse or conduct; or encouraging the child to engage in sexual conduct.
What does “family” include? Individuals related by blood or affinity, marriage or former marriage, biological parents of the same child, foster children, and members or former members of the same household (including roommates).
What about child abuse?
Some very interesting statistics:
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A report of child abuse is made every ten seconds
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More than four children die every day as a result of child abuse
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70% of children that die from abuse are under age of 4
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Child abuse occurs at every socioeconomic level within all ethnic and cultural lines and all religions and all levels of education!
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Approximately 30% of abused and neglected children will later abuse their own children
Statistics re: childhelp.org
In Texas (2008 Crime in Texas.com), victims are primarily female (75%) and the offenders are primarily male (77%). The primarily weapon involved in family violence is physical force with the use of hands, feet or fists (78%).
How can you know if child abuse exists in a household?
Look for these most common child abuse indicators in children:
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Injuries that are unexplained
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Major and sudden changes in a child’s behavior
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Return to earlier behavior: such as bed wetting, thumb sucking, and fear of dark or strangers or more serious language or memory problems
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Serious fear of going home
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Changes in eating or sleeping habits
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Changes in school performance or attendance
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Lack of personal care or hygiene
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New risk taking behaviors
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Inappropriate sexual behavior
If you are a family member, friend, teacher, or child-care giver of a child who has started displaying very different behaviors or showing injuries, it is imperative that you contact someone who can either help this child or prevent any more family violence from occurring in this child’s family. This child and family need help now!
Baby Boomers and Divorce
With high profilers, Al and Tipper Gore announcing they are separating after 40 years of marriage, many Baby Boomers (USA born between 1946-1964) may be wondering who is left in the ”Happily Ever After” group!
Today’s Baby Boomers are more educated than any previous American Generation and their divorce rate is triple that of their parent’s generation. Break ups among long term married couples are becoming more frequent with longer life spans and the growing regrettable acceptability of divorce. In 2008, ¼ of all divorces reported were marriages of over 20 years with divorces of couples 55 or older rising moderately. A longer life span means the possibility of a new relationship, and opportunities for repartnering after age 55 are greater than they used to be.
The top three reasons for long term marriage dissolutions are Abuse, Infidelity, and Money Control Issues. Another rising issue is couples who have been married for decades. Baby Boomers start taking their marriages for granted and are focusing on different issues until it is too late to seek a reconnect with their estranged spouses. These break ups are referred as “Cold Divorces” characterized by isolation, distance and disengagement and are usually a product of a gradual buildup. Empty Nester divorces are also on the rise, since the spouses no longer have their children to hold the marriage together. An AARP survey of older divorced couples found that two-thirds (2/3) of the divorces were initiated by the woman, frequently to the surprise of the man.
A recent poll was conducted by the National Association of Divorce for Women & Children and the Baby Boomer on divorce. The results were really startling! 41% of all participants said that dealing with finances, debt and security were the most challenging parts of finalizing a divorce. Asset division was second at 19%, and Custody of the Children was third at 13%.
Depicting divorce as an unsettling emotional roller coaster ride, 41% of the participants reported coping skills would have been helpful to cope with the divorce process, 28% reported Stress Management, and failure of Communication Skills was a close third at 26%.
Finally, 55% of the participants reported having an amicable relationship with their former spouse. 15% could not be in the same room with their former spouse and only 4% reported they had learned to tolerate the other for the sake of their children! Many expressed sadness, shame and embarrassment for having to divorce.
Some warning signs to look out for in a Boomer Divorce are:
- Spouses who argue at least once a week about money are 30% more likely to get divorced
- If your parents are divorced, you are 40% more likely to get divorced
- If both of you have been previously divorced, you are 90% more likely to seek divorce than those of a first marriage.
The US Census estimates about half of all marriages end in divorce! As you grow older people change, but to preserve a marriage, the spouses need to continue working on their Marriage to Keep it Intact!
The Baby Boomers : Gray Divorce Trend Setters
Recently a very important research paper was released by Bowling Green State University sociologists Susan L. Brown and I-Fen Lin, concerning Divorce after Age 50. With the United States having the highest divorce rate in the world (40-45%), divorce and older adults have not been frequent subjects of research. Since the “boomers” generation came of age, the pampered children of a very strong postwar economy have rebelled against the restrictive conventions of their parents and have pushed the limits of their parents’ institutions and traditions.
The Baby Boomers generation has displayed significant marital discord. After 1979 the young baby boomers were responsible for the extraordinary rise in marital instability in the United States. Although the U. S. divorce rates are starting to head downward, the divorce rates for Boomers have doubled since 1990. 1 in 4 couples who are divorcing today are 50 years and older!
A Pew Research study on social trends found that “when it comes to divorce, baby boomers are less conservative than younger generations. 66% of baby boomers say divorce is preferable to staying in an unhappy marriage as compared to 54% of younger adults.
What are some of the major reasons for the large increase in Boomer divorce?
1. Boomers have the economic livelihood and feasibility to address divorce and this rate will continue to rise. It is projected that by 2030, there will be a 25% increase in boomer divorces! About ½ of these Boomer divorces will come from short-term remarriages.
2. As the “Boomer” children leave the “nest”, many older adults realize that their spouse no longer meet each other’s needs in the next life stage. “If Marriage isn’t making me happy, divorce is now an acceptable solution”.
3. When a lack of communication exists between a couple, infidelities contributes to a breakdown and expedites marriage failure.
4. Another big factor is increasing economic independence of women. Many women now do not have to choose between a bad marriage and poverty. They have the means to care for themselves and want happiness and companionship not provided in a loveless or inadequate marriage.
A divorce always results in both an emotional and financial ending. Boomers have shown that, in this era of individualism and lengthening life expectancies, these individuals want to release themselves from unhappiness and uncertainty. Sad but true, more baby boomers will break their marriage bonds and head out to unknown adventures!
NACOL LAW FIRM P.C.
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Attorney Mark A. Nacol is board certified in Civil Trial Law by the Texas Board of Legal Specialization
