Accepting the Financial Reality of Divorce

Accepting that a marriage is ending can be very challenging, and the array of emotions that can prevent the final acceptance is complex and constantly changing. In divorce, the acceptance of financial realities is particularly difficult. Many clients just don’t want to acknowledge it, yet some of the most important decisions in a divorce settlement are financial in nature. After all, our basic survival needs are met by paying for housing, food and other necessities.   

While many clients don’t want to acknowledge it, some of the most important decisions in a divorce settlement are financial in nature.

As a divorce mediator in both Chicago and New York state, I can think back to a time where I encountered a couple where the wife, desiring a new beginning, had separated from the husband. The husband, surprised and angry that his more than 25-year marriage was ending, was experiencing a lot of difficulty with the idea of sharing the couple’s assets, including a rather large pension. The wife was in a better place than the husband on an emotional level, but she had not considered the implications of the financial decisions she would face in her future.
    
The uncertainty associated with divorce extends to future expectations regarding financial security. It is especially important for couples ending a longer-term marriage to consider the implications of their decisions on their retirements. 

There is a risk, as mediation begins, that a spouse who has not accepted the emotional reality that the marriage is ending is also disconnected from the financial reality as well. Whether obstructed by anger, fear, denial or depression, a lack of focus can negatively impact informed decision making. 

In particular, I have found that one or both spouses may need time or more information to process the possibility or inevitability of their new financial reality. This reality can include the following scenarios: 

1. We are going to have a tougher time making ends meet in two households than we did when we were living together. 
2. I worked hard at my job and contributed to a 401K or pension, and now I may have to share this hard-earned benefit with my soon-to-be ex-spouse. 
3. One of us wants to keep the home, but obtaining financing for a buy-out may be difficult. 
4. Providing financial support for our children may include money that is used for rent or mortgage payments that only benefit one parent. 
5. I sacrificed a career to be a stay-at-home parent, and there are challenges to re-entering the workforce. 

When couples choose to use divorce mediation, they have the opportunity to take the time required to communicate and plan for their new financial circumstances. The mediation process allows for as much research and time as needed, the exploration of options, and an agreed-upon outcome that will often lead to the acceptance of a new reality created by both of you. 

And in the case of the couple I wrote about above, I encouraged them to take time to process and consider their future needs. Upon their return to mediation several months later, they were more certain of their personal requirements and of their mutual desire to make their decisions in a mediation setting where they had control over the outcome.