Divorce may make the most sense when you think you can least afford it.
A dissolution isn't cheap, but there are certain times it can be financially advantageous such as now given our country's current economic predicament.
I am not encouraging divorce, but you should not let a poor economy prevent an inevitable break up. In the stock market, you buy low and sell high. Why would you divorce high and not low?
The current economy significantly affects the outcome of a divorce but not the fundamental decision to file. In general, a couple's economic situation is a contributing factor, but I have yet to see a client choose to file for divorce simply because he is unhappy with the marital income, assets, debts, or liabilities.
There are usually deeper issues and problems that dominate the action. Divorce is something you don't want to choose unless you must. To those of you who must, I want you to keep in mind the timing of a divorce.
As money becomes tighter, a lot of people are increasingly concerned with the costs of divorce, including attorney fees, the additional expenses of a physical separation, and the effects of the divorce on the marital estate.
They see their finances, they see the mortgage is upside down, and they know the likelihood of future child support and spousal maintenance payments will make it difficult to financially manage a divorce, so they go about planning for the future and preparing to file for a divorce later on when they have better financial footing.
But is that the best move?
Hard economic times are potentially favorable to the party that generates more income and has more assets, particularly temporarily depressed assets. It may be less financially painful to divide the assets, such as your home or your retirement account, when the values are much smaller.
With the national unemployment rate hovering around 9% and many more people underemployed or facing cutbacks in hours, judges are more sympathetic when the non-custodial parent's salary or bonus has been cut.
The loss in income and earning capacity could lead to lower child support payments, especially as courts have become more reluctant to impute income to a party given the present economy and lack of available jobs.
Whenever a court looks at alimony and child support it will look at your income. Different courts use different formulas, but in virtually all courts the ability to pay is a critical factor.
How many other things in life work like that where the cost of the product or the process is determined by your ability to pay?
If you are considering filing for divorce, you need to complete a strategic analysis and look at where your assets might logically end up at the end of the divorce, whether they are divided via trial or settlement. Then, assess what those values are today compared to a date in the future. Do the same thing with respect to alimony, child support and debts.
Again, I want to stress that Cordell & Cordell does not advocate for divorce. Do not allow the timing and financial analysis to drive the threshold decision of deciding whether or not getting a divorce is right for you. Your decision to divorce should not be based on a cold financial analysis by you, a lawyer, or a CPA.
But if you've already concluded that you are going to get a divorce or you suspect your spouse may be waiting for favorable circumstances before filing, then you need to sit down with a divorce lawyer to explore the best timing options in your case to minimize your financial exposure.
Joseph Cordell is the Principal Partner of Cordell & Cordell, a nationwide domestic litigation firm focused on men's family law matters. Cordell & Cordell also provides a website dedicated to informing men on the divorce process and the challenges they face. Visit http://www.dadsdivorce.com for more information.
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