Divorce: The Destroyer of Wealth?

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I must thank a co-worker for the inspiration for this post. In order to protect this person, and myself, I’ve changed names and other identifiers. The story remains the same.

Background: My colleague, Allen, is going through a pretty bad divorce with his wife Jane. They have a 5-year-old son, Max.

Now I’ve only heard Allen’s side of the story, so as I talk the bias towards him will be somewhat obvious. Allen maintains primary custody of the child, and Jane is somewhat unfit as a mother. The best example I’ve got is over this past weekend, Jane lost Max in a Target, and Max was found walking out of the store stealing toys. This is not the first time it’s happened on Jane’s watch.

Allen is struggling to get by. He makes about the same as I do, but I don’t have a mortgage, car loan, and a child to pay for either. I’m also not going through a divorce. I haven’t asked how much he pays his divorce attorney, but there are no “bargain” attorneys. Allen and his wife used to share a home about 30 minutes away from work. When gas was above $4.00 a gallon, this really hurt. Jane has moved back in with her mom, 20 minutes in a different direction from work or home. Allen is forever driving in a triangle.

You might be thinking that Allen is getting child-support. That’s proven to be quite difficult to arrange, and Jane has proven quite difficult to present enough money to pay for any support. Were they happily married and Jane simply unemployed, Max could at least stay at home with his mom. But because she isn’t fit to be a mom, Max has to go to day-care.

All these expenses really start to add up. As a result of the stress Allen has re-developed a smoking habit. That is his own problem, but it is something he might not have to pay for if he wasn’t getting divorced.

But divorce is expensive in other ways. If Jane didn’t live with her mom, she’d probably have an apartment. Instead of sharing a home with her husband and son, she now has to pay rent and utilities. Having two parents paying separate bills in different dwellings takes away funds that could be invested, or spent on paying down loans.

Then there are tax considerations. Divorced people are now “single” again in the eyes of the government. Two people together making a total of $60,000 a year pay less income taxes than two single folks who make the split of that separately.

Let’s not get started about how much wealth is lost when people sell their assets simply to get rid of bad memories. Allen is selling his home quickly because he wants to move on to new memories with Max. He’ll likely miss out on thousands he could have gotten by not being in a hurry to sell. Jane will do the same when she pawns her wedding ring and other jewelry.

But you might be thinking none of this matters to you, you’re happily married or unmarried or something else. Well you likely aren’t aware that your tax dollars are paying for divorce too. As divorces have spiked in the last half-century, many courts are flooded with cases. This means dedicated judges and office staff to support the cases. Jane has a court appointed attorney, she only has to pay half of the fees and the government picks up the rest of the tab. Those tax dollars are all you buddy.

I’m not here to endorse marriage for the financial benefits. I’m here to tell you people that are married or about to be married to be very careful. We are too quick to jump into and out of marriages. Marriage is until death do you part, not until Max turns 5 do you part. Do my wallet and yours a favor and don’t get married unless you’re willing to go the the ends of the earth to make it work. Allen and Jane aren’t willing to do that. Their wallets, my wallet, and Max’s heart all suffer because of it.

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By The Weakonomist

The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. Also keep in mind that nothing I say can be construed as financial advice.

categories: personal finance

http://www.TheBoldLife.com Tess The Bold Life

Yes you are very one sided. Not that I doubt that what you say about Jane is true however, Allen has made some serious choices that have put him in his position.

Where are Allen’s parents or other relatives that can help?

A smoking habit? He needs a good counselor instead!

Lawyers would go broke if people stayed married.

And I agree think before you walk down the aisle. If there is even a bit of doubt hold off until there is none.
Good post.
http://missmmoney.blogspot.com/ Miss M

My parents just divorced last year so I got a first hand introduction to the economics of divorce. Lawyers typically cost $350/hr, depending on how long the divorce drags on those fees could eat up all the couple’s assets. Then there’s the question of what to do with the house, my parents have been trying to sell it for a year now in a terrible housing market. My mom has had to delay retirement, she was planning to retire early but now must work indefinitely to support herself. In a way my dad is the one getting screwed, he is a financial idiot and signed a divorce agreement without an attorney. My mom worked her whole life and has a job, still he has to pay her $2000 a month in alimony for the rest of his life. He still has the same expenses they had as a couple (he has to pay the mortgage till the house sells), plus the alimony payments and has to do it on one income while before there were 2.
http://Countingcoinsfinance.com Jayme

I actually read an article yesterday regarding divorce in specific states. There were three they were focusing on, though i really only remember New York since i live there. I was appauled to find that those three states were the only states that did not allow no-fault divorces. as in if a divorce is contested by one or the other they have to go to court, fault has to be assigned and than the jury gets to decide if the couple can divorce or not.

not only does this leave women in verbaly and physicly abusive relationships traped unless they have been diagnossed with a serious mental condition. it also can cost upwards of 100,000 dollars to go through the proceedings, which will not only drain your finances but as stated before you could still be prevented from getting a divorce.
http://weakonomics.com The weakonomist

Good grief. I’m turning out to be more right than I expected. Readers please continue to share your stories or whatever you may know about divorce and money.
http://funny-about-money.com Funny about Money

Divorce is extremely expensive for all concerned. If I had stayed married to the corporate lawyer who evidently was as bored with me as I was with him, I wouldn’t be worrying about whether I’m about to be laid off, since he earns about five times as much as I do now at the height of my earning power and could support us both comfortably.

However, some things are more important than money.

Years ago I wrote a piece for a Scripps-Howard business journal about the cost of divorce for small-business owners. If you own a business, especially if your spouse has an interest in it (which, in a community property state, she or he certainly does), divorce can be ruinous.

BTW, that your child wanders off in Target and slips out the door with a bunch of junk in his little hands doesn’t necessarily make you an unfit parent. Max could be a bit of a pistol. I challenge you to take Max to a large, busy store, purchase a week’s worth of groceries (pay attention to the prices and the quality of the goods! don’t buy any junk and don’t get ripped off), some household products, and underwear that will fit your spouse…and keep that kid under control every second that you’re doing those things. It could be said that smoking around a child is a sign of an unfit parent. Your description makes these two sound like they’re both behaving badly.
http://weakonomics.com the weakonomist

My post never says Allen is a fantastic parent, all I ever said was Jane is unfit to be one based on what I’ve been told. Please keep in mind I only cited one such story of Jane’s experiences with the child. I could do more, but it would reveal more about them than I would feel comfortable doing (they’ve been in the news).

We have no Super Targets here, so there was no grocery shopping going on. Jane was at Target with her boyfriend and Max, getting dog food.

The original point of the post is to discuss how expensive divorce is for everyone, not to win any arguments for Allen. The back story simply exists to explain why I was inspired to write this post.
http://tomaszgorecki.com/blog tom

Let’s face it, people need to look at marriage as a business contract and have a back up plan as anything else in life. If you don’t then you are living on hope, not in reality.

Also, majority of parents today aren’t all that great, in terms of raising kids properly.

And yes divorce is quite messy but the problem is the “stuff” they accumulated during the marriage. Stuff they can’t really afford to keep when something happens, such as now.

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Divorce: The Destroyer of Wealth?

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