Partner
Divorce is already emotionally taxing without the added stressor of financial considerations. When dissolving the contract of marriage, economic losses beat out economic gains every time. Additionally, an equitable division of resources doesn’t always spell an equal division of resources.
Divorce and Economic Stability
According to scholar Julia Heath’s “Determinants of Spells of Poverty Following Divorce,” about half of American families experience poverty following a divorce, and 75% of women who apply for government benefits do so as a result of disrupted marriages or relationships with men.
Additionally, according to professor of political science Mary Cochran, the household income of children’s families drops about 42% on average after their parents have divorced.
While divorce is economically destabilizing for each family that undergoes it, women who have lower personal incomes than their husbands are especially vulnerable to economic damages or even ruin after divorce.
Gender Differences in Economic Partnership Dissolution
According to the American Academy of Political and Social Science (AAPSS), women fare worse than men when it comes to the division of assets. The AAPSS used the Panel Study of Income Dynamic (PSID) to measure the division of economic resources by pre-government and post-government incomes (post-government incomes include taxes and social welfare program cash transfers).
The AAPSS found that women’s losses in economic partnership dissolutions are largely due to the reduction of women’s access to their partners’ earnings. These reductions are sometimes made up for by increases in women’s own earnings, tax reductions, and lessened financial responsibility due to a decrease in family size, but even with these mitigating factors, women tend to experience more significant declines in their post-government incomes than men do.
Divorce and Income
Divorce rates are profoundly impacted by the job security of each spouse, their ages, and their occupations. Thus, it follows that individual spousal incomes are a large factor in how likely two people are to get divorced.
Statistics compiled from the 2019 American Community Survey demonstrate that divorce rates are significantly higher among those who make under $200,000 a year, and divorce becomes exponentially more likely as an individual’s income draws closer to zero. Divorce rates seem to level off at that $200,000 a year mark, at which point divorce rates are 30%.
High Net Worth Divorce
If one of the spouses in a partnership has over $1 million in assets, the divorce is considered to be a high net worth divorce. Assets in high net worth divorces often include pensions, benefits, shared businesses, shared partnerships, business investments, various types of properties and real estate holdings, retirement accounts, 401(k)s, international assets, and more. Each asset is liable to be negotiated and split up between each party.
During the process of a divorce, a skilled attorney can help protect your assets and ensure that you maintain control over them. It can also be helpful to draft either a prenuptial agreement before marriage, a postnuptial agreement after marriage, or a shareholder’s agreement if you own a business in partnership with your spouse.
Seeking Legal Aid During a Divorce
If you are in the process of initiating or pursuing a divorce and are concerned about the economic impact of your separation, contact Aiello & DiFalco LLP, a firm located in Garden City, New York.
Mary Ann Aiello is a highly skilled attorney who has focused on matrimonial and family law for over three decades, while Michael DiFalco has a decade of experience handling hundreds of cases. Either attorney is ready to shepherd you through your divorce process as painlessly and with as few financial losses as possible.