Divorce: A New Financial Reality

Besides adjusting to a new emotional reality, divorce means accepting a new financial reality; and many people this means transitioning to a single income. According to the APA, around half of American marriages end in divorce so this is something a lot of us will face in our lifetimes. Unfortunately for many divorcees, particularly women, transitioning to a single income can feel like financial disaster: according to research from insurance provider Allianz two thirds of women feel their divorce created a financial crisis.

Track your spending and anticipate future expenses

At any point in your life, tracking your spending is a good habit to get into but especially so when your marriage is ending. Find out how much you spend on what. If you haven’t tracked your spending until now, use your credit card statements to estimate previous expenses. There are a variety of budgeting apps to help you do this. Once you know your current spending, you can estimate how much you will need to continue your current standard of living. This is a good first step in negotiating a settlement.

Gather documentation

Having the right financial records to hand early on in the divorce proceedings is very important. Correct documentation can help you avoid misunderstandings when reaching a settlement. Gathering documents can take longer than you think so start early. Particularly important are your checking and savings account statements, as well as statements from retirement and investment accounts.

Health

Many couples rely on the coverage of one partner’s health insurance plan, so divorce can create a lot of health questions. There should be a way for you to get some kind of health coverage in the transition period. If you are eligible for a legislation known as Cobra, you can get health insurance for 36 months on your spouse’s plan. In addition, one’s health insurance may also cover dental care and medical expenses for lower income divorcees, as long as your divorce is equitable. Believe it or not sometimes people divorce intentionally and pile all of the assets on the well spouse so the sick spouse can get under the income threshold to qualify for Medicaid. This is known as ‘Medicaid divorce.’ The courts have caught on however so make clear you are not trying to do this by making your divorce equitable – something you should aim to do anyway.

Divorce can be a hugely stressful part of a person’s life but in reality a lot of people will experience it. With the right foreknowledge and preparation you can minimize the financial burden and embark on your new single life.

Author of this article, Lucy Wyndham, is a freelance writer and former Financial Advisor. After a decade in industry, she took a step backward to spend more time with her family and to follow her love of writing.

Divorce Rates in the UK Rise But Stay Well Below Their Peak

The year 2016 saw the number of divorces amongst opposite-sex couples rise by 5.8% to 106,959, although this is still about 30% off its 2003 peak of 153,065. When considering the reasons for this, three possibilities clearly stand out.

Practical difficulties of divorcing

Marriage is intended to be a lifelong commitment and exiting that commitment can lead to all kinds of expensive and challenging complications. While some of these could be reduced by the introduction of “no-fault” divorce, possibly together with a greater awareness of and clarity around pre-nuptial agreements (pre-nups), others are far more difficult to resolve.

The most obvious example of this is the division of property and the practical consequences of dividing a household, many of which revolve around the fact that adults living as a couple can generally live more cheaply than two individuals living in their own homes. These difficulties can increase exponentially with the arrival of children, particularly in their pre-school years, when the need for childcare is at its greatest.

Rise in cohabitation

When couples cohabit outside of marriage, they can go their separate ways without having to enter into formal divorce proceedings but this has both advantages and disadvantages. On the one hand, it means that couples without children can simply agree to part company and move on, while couples with children can make their own arrangements for their future care and maintenance. On the other hand, when couples split on less-than-amicable terms, this can lead to difficulties in dividing assets fairly.

For example, while there are certain situations in which a partner whose name is not on the deeds of a property may be held to have a “beneficial interest” therein, there are certain, specific, requirements to be met in order for this to be recognized, general help, financial or otherwise, is highly unlikely to qualify. Because of this, it is strongly recommended for co-habiting couples to have formal agreements in place regarding ownership of assets, at least significant ones such as property.

Later marriage

For much of history, people have been encouraged to marry as early as possible for a number of entirely practical reasons. Women, in particular, often needed to marry for economic reasons, as the novels of Jane Austen show only too clearly. In modern times, however, women have much greater opportunities for earning an income and as such are under less economic pressure to marry.

Similarly, the fact that women can now reasonably expect to be able to have children well into their late thirties and even early forties also reduces the need to marry at a younger age as does the fact that having children outside of marriage is, by and large, socially acceptable. Putting all of this together means that instead of marriage being the time when couples can formally start to live together, in their first home, it is more likely to be a milestone in a relationship after couples have already lived together for some time and, in simple terms, have already established that they can do so successfully, hence are less likely to divorce.

Fletcher Day are a full service law firm based in Mayfair, London. There team of divorce solicitors in London can advise on a range of matters relating to family law including divorce, prenuptial agreements, civil partnerships and separation agreements.

Moving On After A Divorce Or Break Up

Moving on Mentally After A Divorce

In the United States of America, a couple divorces every 13 seconds. Divorce has become a norm in our world today but this does not mean the process is any less painful or stressful. By the age of 50, more than 90 percent of Americans get married but almost half of them do not find their happily ever after. For some, it has been a long hard decision taken over months or years spent trying to make their relationship work. For others, it is swift and sometimes unexpected. So how do you move on from a divorce? Here are just a few tips to get you started.

Accept & Let Go

The first step to moving on from a divorce can be one of the hardest. It is facing the situation and acknowledging the end of your marriage. The period immediately after can be emotional and unpredictable; ranging from sadness over lost dreams to regrets and denial over your decision.

It is completely okay to mourn the loss of your marriage. No one enters a marriage thinking they would like to get divorced. In fact, it is important that you let yourself feel the loss and come to terms with it. Grief is a natural reaction to loss.

Reconnect with Yourself

Whether it is through self-reflection, venting to a close friend or counselling, reconnect with your spiritual side. Begin by focusing on yourself. Banish any negative unwanted thoughts and look to defining your self-worth. Your marriage may be over but there are many positive things you may have to offer. Realize that your failed marriage does not define you.

As you begin to find your true self again, a clear understanding of what you want and what makes you truly happy will help you move forward. Finally, self-reflection and acceptance mean addressing your responsibility in the breakdown of your marriage. It is vital that you not only recognize your part but make peace with it and learn from your mistakes for your future relationships. Understand that you cannot change the past events and you cannot change your ex-partner. What you can change, however, is yourself.

Make the Shift

Finally, one of the most important steps is making the change in mindset. This can easily be judged as one of the most difficult parts of moving on and requires the commitment to moving on.  In the beginning, it is normal to grieve over what occurred but now it is time to commit to being happy again. This does not mean that all the feelings of sadness or loss automatically disappear. Instead, spend time focusing on the future and exercise the strength to put a time limit on the self-pitying mindset that may still pop up from time to time. It is the perfect time to pursue those unfulfilled dreams of yours that got lost in the translation of your marriage.

In reality, life is not written as the fairy tales are and we do not always end up having that happily ever after. While incredibly painful, divorce can also serve as a catalyst for growth and self-evolution. This does not happen overnight; there is no time limit. However, with these tips, you can slowly begin the process. After all, why shouldn’t you find happiness again?

Author of this article, Lucy Wyndham, is a freelance writer and former Financial Advisor. After a decade in industry, she took a step backward to spend more time with her family and to follow her love of writing.