Sunday, May 12, 2002
Divorcing couples should consult mediators when dividing assets
A story released today by the Associated Press reports that every day, hundreds of marriages break up, and how the dollars are divided can be critical to how fast the couple and their children heal.
"The reality of divorce is that couples generally are forced to maintain two households instead of one on the same amount of income," said Violet P. Woodhouse, a family law specialist in Newport Beach, Calif. "Nobody lives as well. Everybody lowers their standard of living."
Increasingly, she added, "they also have to figure out how to pay their creditors."
Roughly half of first marriages end in divorce, according to Census Bureau figures, typically after eight years. But Woodhouse, who wrote the book Divorce & Money, says she's seeing an increasing number of divorces after 20 or 30 years.
For Reina Lakser, 54, the key to reaching a settlement to end her marriage of more than two decades was getting help from Nancy B. Kaye, a financial adviser in Port Washington, N.Y., who is on the board of the Association of Divorce Financial Planners.
"It was a war -- back and forth, back and forth -- with the lawyers," Lakser said.
"Then Nancy got involved. She was the rational voice. She said, 'Here is what you're entitled to, here is what you need to survive, here is how you both can do it.'"
Kaye believes that more couples should seek professional financial advice before they meet in court in what can result in very expensive litigation.
She said that one of the biggest mistakes couples make when trying to divide their property is not looking at liquidity.
"Say they try to divide the assets 50-50," she said. "The wife gets the home, the husband gets their $400,000 saving account. Fine. So just how will she support herself that way?"
Kaye argued, too, that sometimes a 60-40 split would be more equitable "when you consider the impact on your cash flow today, and what it's going to look like five years from now."