Getting a Good Deal on a Divorce

For the financial planner, the Serenity Prayer should say:

God grant me the serenity to accept the risks I can't manage, the know-how to manage the risks I can, and the wisdom to know the difference. 

Some risks are just really hard to manage.  Like marriage.  Well actually, not marriage, but divorce.  Technically, I think marriage qualifies as a "peril" (in insurance terms), with the "risk" being that of it possibly resulting in divorce.

We know the statistics: roughly half of all marriages don't last (actually, 41% of first marriages, 60% of second marriages and 73% of third marriages. see a pattern?).  Not the best odds.  And for the ones who don't stay together, divorce is often devastating financially.  Two households, spousal support, child support, lots of lawyers, (many of whom apparently now charge $700-800 an hour). 

So what's the best way to manage the financial risk of getting divorced?  Don't get married, of course!  I mean why assume that kind of liability?  Is the marital tax benefit really that significant when compared to the possible costs of a divorce? How bad is your need to get on your boyfriend/girlfriend's employee sponsored health insurance plan?  Yes, I know,  there are also estate planning, Social Security and insurance benefits to marriage, but is that really why people get married? No.  Most people get married because they're young and in love, of course. (I'll just hold any cynical comments and leave it at that.)

The McCourts, by the way, are reported to have just spent 19 million on their divorce.   

So let's say you're an incurable romantic or you want your children to have what you never did, and you just gotta throw a really big expensive party where you publicly declare your undying love and commitment to your soul-mate.  Fine.  Sadly, a few short years later, when you're sitting across the table from each other in mediation, you will take full advantage of the opportunity to really stick it to your former love, dredging up every last drop of resentment in an attempt to financially leverage your pain.  That, of course, is the biggest reason why divorce is so expensive.  Bickering takes up a lot of time, and so does going to court over and over again, and your lawyer is going to charge you for that time.  You are paying  $800 an hour to have a lawyer sit there and listen to you and your ex act like children, and before you know it, your retirement money, college savings and everything else has evaporated.

Since it seems like a lot of people around me are getting divorced, I thought I would write a column about the price of a divorce, and maybe uncover some way you can get a great deal on one (maybe a Groupon?).  

Nope, no deals.  And if you buy a $50 divorce kit you may seriously live to regret it. 

So what CAN you do to manage the divorce risk?

Let's review:

• Top cause of marriage? Naivete (love). 
• Top cause of divorce?  Marriage.
• Second place? Money.
• What to do? While you're still in love, hire a financial planner to help you deal with your financial differences before they lead to divorce.
• What else? Go to a therapist to deal with your issues. You can get a really good therapist for less than $200 an hour, and that means you can argue for about 4 times as many hours in front of your therapist as you can in front of your lawyer for the same price.  It's like a 75% off deal! 

Maybe you can't help falling in love and getting married, and maybe you can't always help it if your marriage isn't quite as perfect as you had mistakenly believed it would be, but maybe a good financial planner and therapist can help you work things out, and I say it's a great investment if the return is a lowered risk of divorce.  If love or the kids don't provide a strong enough motivation, just think about how much money you'll save by not getting divorced!  And if your marriage has already fallen apart, you should definitely hire a financial planner and a therapist because you've got a whole list of new issues to figure out, and even if you paid him $1,000 an hour, your lawyer won't help you heal emotionally or learn what you need to be doing with your money.  And if you save enough money, maybe you can use it to go to law school before you get married again...