Many have lost their jobs, or at least have taken a cut in income.  According to an eye-opening article by Caren Chesler, many have decided to file for divorce or if already divorced, seek an alimony or child-support reduction. And, many have succeeded in forging economically favorable divorce settlements and convincing judges to lower support obligations.  In the article entitled “Untying the Knot,” Ms. Chesler chronicles the recent calamitous effects the economic downturn has had on marriages of higher income couples. Since in many of those marriages, only one person (monotonously, often the male) made the lion’s share of the household income, many have seen this as an opportunity to save millions in a divorce settlement.

Also true when it comes to support obligations: former high wage earners who have been laid off are unable to find jobs that pay the same high salaries. Although historically judges would be quite suspicious of husbands who “reported a drastic decrease in pay during a divorce proceeding…such a scenario is believable” today.  The “Great Recession”, as many are billing these past seventeen months, has been a boon for many divorce filers.

While it is obvious that a divorce filing is not usually solely motivated by an attempt to save money, many fellow practitioners are surprised by how much of a factor it has been as of late. According to a number of people quoted in Ms. Chesler’s article, divorce filers have saved millions of dollars due to the economic realities of today. Theodore Sternklar, for example, a NYC based attorney, highlighted this point when he said, “If you’re going to market-time a divorce, now is about as good as you’re going to get in your lifetime.” Interestingly, this has not really been the case for middle-income households. Since a typical middle-income household’s biggest asset is “the home and a 401k,” it’s not nearly as economically advantageous for those couples to go through a divorce proceeding.  Because of this, the divorce rate for such households has not shown any significant increase. 

Overall, husbands, wives, attorneys and judges, have taken notice of the economic condition our nation and many of its citizens are currently facing. And, specifically a number of higher earning husbands have used this opportunity to file for divorce while their net worth has dipped. In the process, they have been able to save quite a bit in both money to be doled out, and money that might be recouped once the market finally recovers.

This is posted with permission from both the author Caren Chesler of Ocean Grove, New Jersey and the publisher, Private Wealth Magazine. Here is a link to the entire article. You can also check out Caren Chesler’s homepage.