Breaking up often creates financial instability for each party

For some marriages, the COVID-19 pandemic produced the perfect storm: financial stress and too much quarantine togetherness. The result? An increase in divorce rates as American couples were pelted with the factors most often cited for splitting up.

According to Legal Templates, an online firm providing access to legal documents, the number of people searching for divorce information and purchasing the firm’s divorce kit was 34 percent greater from March to June 2020 as compared to same four months in 2019.

Here, we talked with various industry professionals who share their thoughts on the financial complications of divorce and what to look out for.

Think About Dollars Post the Divorce Decree

Too many divorcing couples – in particular, the women in the disintegrating relationship – do not force themselves to consider divorce’s future financial impacts. Often, they just want out regardless of the consequences – even the ones with dollars attached.

That’s not a gainful approach to a secure financial future post-divorce, according to at least one financial advisor specializing in divorce matters.

“The most important thing is not only to think about your financial need through the divorce process but even more so after the divorce process,” said Stacy Francis, a certified divorce financial analyst with Francis Financial, Inc., based in Manhattan. “Not only do you have to review your expenses now, but you have to take an honest look at what those expenses will be after the divorce.”

Standard of Living Takes a Nosedive

It is not a matter of “if” your standard of living is going to change, but how resilient you will be once the divorce is final and change takes place.

“For the vast majority of individuals, their lifestyle and standard of living drop significantly during and after divorce,” said Francis. “They are being squeezed with higher expenses of living separately and lower income. A lot of divorcing couples are struggling.”

According to a U.S. Census 2020 report released April 22, 2021, titled, “Number, Timing and Duration of Marriages and Divorces: 2016,” more divorced women (20%) as compared to divorced men (11%) have incomes at or below the poverty level when measured 12 months post the split
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Gray Divorce

Defined as divorce that occurs past age 50, “gray divorce” is a killer of financial stability, as per the results of a recent study from the National Center for Family & Marriage Research at Bowling Green State University in Ohio.
The report states that divorcees age 50 or older can expect their wealth to drop by about 50 percent.

“It is a grim picture,” was how Susan Brown, the BGSU sociology professor and co-director of the NCFMR conducting the research of more than 20,000 American divorcees born before 1960 described the results in an article published in 2019 by the Los Angeles Times.

Bouncing back – financially speaking – is more challenging at an older age.

“There just isn’t enough time,” said Brown.

Mr. Moms Face “Women’s Issues” after Split

With more men staying home to care for the kids, the roles in divorce have changed for some couples. In decades past, child support and spousal support orders mostly were imposed on men to support their former wives. Now, a growing number of dads are facing the challenges that previously impacted stay-at-home moms going through divorce.

“Challenges for men vary based on their family role before the divorce,” said Dianne Nolin, a certified divorce financial analyst and co-founder of Argent Bridge Advisors located in Vienna, Virginia. “With more men taking on the role of at-home parent, they may find themselves re-entering the workforce, trimming a budget to live within a spousal support award, or juggling new expenses such as healthcare costs. This has long been an issue for women in a more traditional single income family with husbands working outside the home.”

That Ring Has Value…for Her

As divorce divides the marital assets and courts put the final stamp of approval on who gets what, former spouses often wonder about the fate of that sparkly engagement ring: Who gets to keep it? Who gets its economic value?
The answer does vary state-to-state, but in general, the engagement ring remains an asset for the one who received it.

“It was a gift given prior to the contract (the legal marriage),” explained Judy Herbst, executive director of Savvy Ladies, a New York City based non-profit offering free financial assistance to women.

Before joining Savvy Ladies, Herbst established a thriving niche business model: helping divorced women tap into the value of the ring(s) from their failed marriages. In 2005, she established an online clearinghouse dedicated to the sale of rings owned by divorcees.

“The ring is a financial asset,” said Herbst. “For her.”