Money Magazine published an article titled “Don’t Let Divorce Wreck Your Finances” (April 4, 2014) . The article addressed the financial issues that couples need to take into deep consideration in the event of a divorce. The article points out that one of the harshest realities after divorce is that while living expenses suddenly go up due to the loss of income, spending habits of both parties rarely change post divorce.
In 1998 one of the largest longitudinal (25 years) studies was conducted looking at children of divorce. It was called “The Long-Term Impact of Divorce on Children- A first Report from a 25 year study”, conducted by Judith S. Wallerstein (Of the Judith Wallerstein Center for Family Transition) and Julia Lewis (San Francisco State University) for The Family and Conciliation Courts Review. This institution conducted many studies on family, divorce and finances, how it affects the couple themselves- but how it affects the children. However, this one was the most expansive in the number of families involved, and how long the followed these children- into adulthood. While reading this paper, and the corresponding case studies, it became apparent that not only were the financial implications of divorce often dire for the children, the parents often then struggled with guilt and remorse about the ongoing proceedings, the money spent on trying to keep money, and the loss that created for their children.
To think that all of that heartache can be eliminated with the simple act of purchasing a prenuptial agreement makes the situation a ‘no-brainer’ for many couples. The couples in the study did not have prenuptial agreements- and we are sure that even the ones who did not say it, certainly wish they had.
Although prenuptial agreements here in New York cannot spell out details, legally, about custody, there are ways you can incorporate financial planning into your future so that children do not have to be part of the financial fall out from a divorce. The cost of judges, mediators and other professionals that get involved in divorces is astronomical- and what is so sad about that is that as the bills roll in and get paid, every dollar that flies out the window is one that could have gone to your child or children’s future- their education, a down payment on their starter home, their wedding, or even a mom and child or dad and child vacation together. Quality schooling, quality of life, and quality time together are all casualties when we don’t plan financially today, for what could happen tomorrow.
Although none of us wants to think that their marriage will become one of the negative statistics, it is a very real possibility for all couples. A prenuptial agreement can be a tool to help couples in the event of divorce. If both parties take an active role in planning how they will both contribute to savings and spending habits during their marriage, it may keep both parties more keenly aware of their financial needs and help ease the transition for both parties in the event of a future divorce.