FIRE and Divorce

[FIREd]

The lesson for me: I remember threads here where others would argue that you should really divide your assets by two if you're married. Now I understand. It's easy to retire on a couple of million if there's two of you sharing expenses. It's not quite as easy, or at least the same, for one on a million.

+1. Splitting assets in half and losing the ability to share expenses with a spouse really takes a bite. We were already retired when we divorced and it meant a significantly lower standard of living for each of us than we used to enjoy as a married couple. I decided to stay retired and make changes to my lifestyle to reflect my reduced ressources. She preferred to go back to work (consulting) than to cut back. For me, some luxuries have become a thing of the past. Exit business class traveling for example - but I am making changes to ensure that I won't have to fly long haul as frequently in the future (90% of my flying was to go visit family and I will be moving within driving distance of their place of residence). The divorce has been a life-altering event, financially, but not a devastating blow. I am still able to blow some dough, just not as freely as before. But I will say this: even with a much reduced net worth, I feel more secure now that the dough I have is mine and mine only.

 

[Rianne]

I hear about high profile divorces. Is it true the judge or whoever is mediating the divorce takes into consideration the standard of living you're accustomed to? I get this when $MM are at stake, but are middle class people judged the same? Length of marriage, children involved and who contributed most $$ to the marriage must go into this process. I understand the law is different from state to state.

 

[Scuba]

I hear about high profile divorces. Is it true the judge or whoever is mediating the divorce takes into consideration the standard of living you're accustomed to? I get this when $MM are at stake, but are middle class people judged the same? Length of marriage, children involved and who contributed most $$ to the marriage must go into this process. I understand the law is different from state to state.

I know a guy in CA who has 4 kids. Wife decided to divorce him and shortly thereafter had a boyfriend move in. Former husband didn’t want the divorce. He lived in a 600 SF apartment while his former wife lived in a 4 BR house in a nice neighborhood (same house they used to share). He was paying a huge % of his salary in child support and alimony. Pretty much wrecked his standard of living until he met a woman years later and moved in with her. Didn’t seem fair to me that his former DW continued to enjoy her former standard of living while our friend had to have his kids sleep on air mattresses in his tiny apartments living room when they visited.

 

[Sunset]

I hear about high profile divorces. Is it true the judge or whoever is mediating the divorce takes into consideration the standard of living you're accustomed to? I get this when $MM are at stake, but are middle class people judged the same? Length of marriage, children involved and who contributed most $$ to the marriage must go into this process. I understand the law is different from state to state.

Length of marriage - practically doesn't matter, get divorced 1 week after marriage and the "other" half could easily be entitled to 50% of jointly owned things.

I think high profile are out of even judges ability to be realistic, and it's only money, so the numbers are often outrageous for support.

In middle class, often a judge can decide Joe Blow cannot afford to send the kids to private school in Switzerland even if the Wife thinks it's the only school for the kids. Because a judge will apply their own life experiences to the situation so the more similar the easier it is for the judge to be accurate.

When children are involved, the wife gets custody about 95% of the time in contested divorces, and where the parent with custody WINS big time money wise.
Get the house (as that is where the kids are used to living).
Support (as supposedly the money will be spent on kids -> but this is NOT enforced/checked).
Alimony is possible as taking care of children is a full time job ( I have heard this so often even when kids are in high school ).

------- Not a lawyer, and variation among states is large -----------

 

[aja8888]

+1. Splitting assets in half and losing the ability to share expenses with a spouse really takes a bite. We were already retired when we divorced and it meant a significantly lower standard of living for each of us than we used to enjoy as a married couple. I decided to stay retired and make changes to my lifestyle to reflect my reduced ressources. She preferred to go back to work (consulting) than to cut back. For me, some luxuries have become a thing of the past. Exit business class traveling for example - but I am making changes to ensure that I won't have to fly long haul as frequently in the future (90% of my flying was to go visit family and I will be moving within driving distance of their place of residence). The divorce has been a life-altering event, financially, but not a devastating blow. I am still able to blow some dough, just not as freely as before. But I will say this: even with a much reduced net worth, I feel more secure now that the dough I have is mine and mine only.

Splitting the assets is the easy part. These events get way messier when there are a couple of young children in the mix. Recovery time can then add up to a decade or more.

 

[street]

So do most 401K's and IRA's get split some how or how do they take care of those assets.

 

[aja8888]

So do most 401K's and IRA's get split some how or how do they take care of those assets.

https://en.wikipedia.org/wiki/Qualified_domestic_relations_order

A qualified domestic relations order (or QDRO, pronounced "cue-dro" or "qua-dro"), is a judicial order in the United States, entered as part of a property division in a divorce or legal separation that splits a retirement plan or pension plan by recognizing joint marital ownership interests in the plan, specifically the former spouse's interest in that spouse's share of the asset. A QDRO's recognition of spousal ownership interest in a plan participant's (employee's) pension plan awards a portion of the plan participant's benefit to an alternate payee. An alternate payee must be a spouse, former spouse, child or other dependent of the plan participant. A QDRO may also be entered for spousal support or child support.[1]

 

[harllee]

For anyone who is considering getting married, I suggest you consider having a Premarital Agreement to protect your assets. See a lawyer in your area who specializes in Premarital Agreements.

 

[Rianne]

For anyone who is considering getting married, I suggest you consider having a Premarital Agreement to protect your assets. See a lawyer in your area who specializes in Premarital Agreements.

That is a little unromantic. What about the couple (us) who started out with nothing. I had the income and career in the beginning while he finished school with a Phd. Then his career took precedence. I still worked but we moved often. I got an MBA, but it was hard to get a career going later. We supported each other along the way. IMO, we are equals.

 

[aja8888]

That is a little unromantic. What about the couple (us) who started out with nothing. I had the income and career in the beginning while he finished school with a Phd. Then his career took precedence. I still worked but we moved often. I got an MBA, but it was hard to get a career going later. We supported each other along the way. IMO, we are equals.

If you started with nothing, or not much in the way of assets, then there is no reason for a prenup.

 

[Rianne]

If you started with nothing, or not much in the way of assets, then there is no reason for a prenup.

I'm guessing much of this discussion is about couples who started with nothing, then one of them makes a bunch of money. Much like Axe in Billions.

 

[aja8888]

I'm guessing much of this discussion is about couples who started with nothing, then one of them makes a bunch of money. Much like Axe in Billions.

I was commenting on your post in response to the one above it on the need for a prenup. With long marriages, it doesn't matter who made the money, it gets split according to community property rules or in arbitration if there are no community property rules.

A prenup is something one (or both) should consider if they get married later in life and have already accumulated significant assets.

I have to agree with you that none of this is very romantic; it just becomes business during a divorce.

 

[harllee]

Most people I know with Premarital Agreements (and I know quite a few) are on their second or third marriage with substantial assets. I was addressing my comments to readers on this Forum, most people here are older and most have quite a few assets.

I know of only one first marriage with a Premarital and that is where a family business was involved.

True, not very romantic but if something were to happen to my DH (I pray not!) at this stage in my life I would not consider remarriage without a Premarital. Heck, my mother remarried several years ago and she had a Premarital Agreement!

 

[tulak]

But I will say this: even with a much reduced net worth, I feel more secure now that the dough I have is mine and mine only.

+1. This is a wonderful feeling. My divorce isn't finalized, but we've already split all of our assets. There's still some hiccups because we have kids, but that has been minor and will eventually go away. In the meantime, I appreciate that I only have to account for my own spending. I doubt that I could ever go back, which makes me wonder if I'd ever consider marriage again. Never say never, but my preference would be to have a long-term relationship instead.

Splitting the assets is the easy part. These events get way messier when there are a couple of young children in the mix. Recovery time can then add up to a decade or more.

Young kids make it harder. I was lucky. We only had a few years until our youngest is 18 when things went sideways. I decided to wait it out, as did soon to be ex-DW. I started a thread here about this a long time ago. Maybe I'll post an update.

 

[Dtail]

+1. This is a wonderful feeling. My divorce isn't finalized, but we've already split all of our assets. There's still some hiccups because we have kids, but that has been minor and will eventually go away. In the meantime, I appreciate that I only have to account for my own spending. I doubt that I could ever go back, which makes me wonder if I'd ever consider marriage again. Never say never, but my preference would be to have a long-term relationship instead.


Bolded - that is what my DGF and I have going on 9 years. Both of us have been divorced and will not go through it again.

 

[Vacation4us]

I remarried 1 year ago. We have a prenup. It definitely isn't romantic but it really was in both our best interests.

My husband lost $$$ on his last divorce to protect his pension and 8 years later she is still fighting each QDRO on the last day to appeal. Who knew this was legal

We will retire in 2 years , although we each pay for the sins of our past happiness is the best revenge. Divorce is ugly but never having a significant other over fear of losing your ass..ets again is just soooo sad to me.

 

[haha]

I was not happy to get divorced, and I am not exactly ecstatic to be single even years later. I have an important post-marriage relationship but live alone and plan to continue this. Divorce and big property divisions were very uncommon when I got married. Who knows what currently common domestic arrangements will turn out to be very expensive down the road a bit if things go south.

I do know that it is safer to pay as you go than to pay an as yet undetermined exit fee. Especially when commonly she is the one who wants a divorce, and he is the main payor.

Ha

 

[Chuckanut]

We will retire in 2 years , although we each pay for the sins of our past happiness is the best revenge.

Like my old grand pappy used to say: Living well is the best revenge.

 

[Rianne]

I remembered this arrangement from "Becoming Warren Buffet." It brings love and marriage to another level.
https://honey.nine.com.au/2017/06/28/08/29/warren-buffets-two-wives

 

[W2R]

[…]I have an important post-marriage relationship but live alone and plan to continue this. Divorce and big property divisions were very uncommon when I got married. Who knows what currently common domestic arrangements will turn out to be very expensive down the road a bit if things go south.

That is a real concern, IMO, and it is wise to keep that in mind when dating these days. The world is a crazy place and who knows what the future will bring.

We make a big effort to keep our finances completely separate in all respects, including living in separate houses next door to each other. We love this arrangement (for us). At our age, we are pretty much done with our working years. The point being that neither of us could afford to start over again at this age, so we are doing all we can think of to eliminate possible financial risks.

A big bonus is that since we do not mix his money and mine, we have no reasons to argue about money.

His entire house is his "man cave", or actually his ham shack since his hobby is ham radio. My house is just like I want it too so I guess it's my "woman cave". For us this is perfect. When we are together, it is because both of us actually want to be together at that moment.

 

[Carpediem]

My house is just like I want it too so I guess it's my "woman cave".

"She Shed", W2R!

 

[Sunset]

For anyone who is considering getting married, I suggest you consider having a Premarital Agreement to protect your assets. See a lawyer in your area who specializes in Premarital Agreements.

Or, marry up

 

[W2R]

"She Shed", W2R!

Love it!!!! That's it!!! Anyway, it doesn't look like a guy lives here, that's for sure. Cheap paintings and sculptures all over the house. I didn't repaint when I moved in, even though the wall colors are sort of pink, or at least a beige that is a little too pinkish for most guys.

 

[ExFlyBoy5]

I was commenting on your post in response to the one above it on the need for a prenup. With long marriages, it doesn't matter who made the money, it gets split according to community property rules or in arbitration if there are no community property rules.

A prenup is something one (or both) should consider if they get married later in life and have already accumulated significant assets.

I have to agree with you that none of this is very romantic; it just becomes business during a divorce.

This. Prenups are not for assets acquired *after* marriage, they are for those that are bringing something into the marriage. We too have a pre-nup and the only heartache about it have been other people's opinion on it. To me, it's an insurance policy...as long as there is no need for it, it just sits in a drawer and collects dust. BUT...as soon as you have a "claim", it's something you would like to have.

We too keep much of our finances separate and it has made things very easy. We do have a "household" joint account and the primary home is held jointly, but everything else is kept separate. In the event of divorce, the financial hit won't be nearly as devastating because of the pre-nup.

 

[youbet]

In the event of divorce, the financial hit won't be nearly as devastating because of the pre-nup.

I'm a bit confused by this, likely because I don't know much about pre-nups other than gossip on Internet forums.

Did you mean to say " In the event of divorce, the financial hit won't be nearly as devastating - TO ME - because of the pre-nup?"

If a pre-nup gives the rules regarding disposition of assets owned prior to the marriage, that means it determines how pre-marriage assets are handled during the divorce settlement. But that doesn't save any money in terms of the total pot, it just makes sure folks leave the relationship with consideration of what they brought in as specified in the pre-nup.

But the shared financial damage such as hefty lawyer fees (if contested), splitting up / disposing of physical assets such as real estate, etc., are all still there, right? That is, as a couple in aggregate, you might still take a financial hit due to the breakup of the partnership. But with a pre-nup, you have a better chance of getting a fair share which considers what you came into the partnership with (per the pre-nup terms).

Or am I missing something?

BTW, I think pre-nups are a great idea in many situations. I've seen friends use them when they remarry and want to protect their assets for their children and similar situations. I just don't understand how a pre-nup would save much in terms of the overall cost of the divorce, husband/wife allocations not considered.