A family mediator breaks down the financial jeopardy of divorce

Divorce can be a lonely and scary journey, and trying not to become overwhelmed can be difficult. The feelings of dismay that come with it can be like an avalanche of grief or an acute pain that you’ve tolerated for years. When we are in love and planning our futures with our loved ones, we do not factor in financial risk. In fact, it can be the contrary. We often consider our union with our loved one to hold some form of financial security.

Fear for our financial future is one of two of our biggest concerns, following marriage breakdown. Our level of anxiety around finances depends on our personal circumstances, and our way of life with our partners in the years prior to making the decision to split. But one thing for sure is, we are all in some level of financial jeopardy when we are dealing with divorce.

State of Mind

I know your state of mind won’t help pay a bill or provide for your retirement, but making rational, informed, calm decisions when you are not in the middle of a conflict will stand to you. We have associated revenge and wanting someone to pay with matrimonial breakdown for many years.

Finding a way to deal with our hurt and pain that is not associated with the division of assets, and the provisions needed for ourselves and our children, is a really important step in getting through divorce.

We live in what is referred to in law as a ‘no fault state’. The idea that a person’s bad behaviour will be the cause of them becoming penniless is simply not a reality in family law courts in Ireland. The manner in which we have been dealing with divorce through courts, and with the use of protracted legal cases against each other, has without doubt been fuelling legal battles, and in turn raising the costs. Separating the sin from the sinner and dealing with the facts of your finances will help.

Examine Your Finances

Finances may not have been your area of expertise throughout your marriage. It may be something that you have a mental block around. Or, you might love excel and have a spreadsheet for every occasion. Whichever the case, when entering into a separation or divorce, you must examine what your financial picture looks like. Everyone’s is different and you must become familiar with yours.

Start with a financial statement, you’ll find a basic form online. As well as a current financial statement, it is important to think about the future, and what those future financial costs may look like. Writing things down will always help to get a clear picture. It’s not necessary for you to incur the cost of a financial advisor, but if you can afford it, an hour or two with a qualified advisor will help you get a clearer picture of your finances.

Be Realistic

Looking at finances and trying to make a plan that is suitable for your family is about dealing with what there is. That is, whether or not we want all of the bills paid and money for holidays too. There is always a limit to our finances. It is pointless creating a wish list that cannot be funded. Try and deal with the facts. What are the incomes and expenses? You have to understand that a fair division should be made.

Keep in mind that the courts do not expect either party of a divorce to starve, and nor should we. What there is in the family pot, should be shared. The priority is always on the well-being of our children. We should keep in mind that ‘correct provision’ is the rule of the land. Try not to allow the situation to be riled up by emotion.

Do not be afraid or too proud to examine avenues of financial assistance from the State. Very often, there are benefits available when your marital status or household income has changed. This information is available online on Citizens Advice. The party who has relinquished their rights to the family home can apply for the first time buyer grant under the Fresh Start Principle.

Cost of Divorce

This should have a warning sign attached. The cost of divorce can be eye watering. There are currently no fixed costs for legal fees with solicitors or barristers. Typically, your barristers fee is negotiated through your solicitor on your behalf, and typically your solicitors fee will be discussed with you in advance.

Retainers are generally paid to solicitors prior to any work being undertaken. Due to the unknown amount of time needed to be spent on each case, the total bills are generally not calculated in advance. The legal bill for an average family law case can be the region of €30,000 per person, and quite frequently more.

The alternative to using a solicitor and barrister and incurring the associated costs, is to use a Family Mediator who will work with both parties to assist with your separation agreement. A family mediator can draft a legally binding agreement that can be used for a consent divorce. This will cost a fraction of the cost. Seek out an experienced family mediator who will guide you through the process and outline the full cost in advance.

How to Divide Marital Assets

One of the many difficulties in dividing marital assets is actually clarifying what marital assets are. Both parties to a marriage can technically claim on anything in the name of either party. Typically the courts look to provide both parties and their children with what is referred to in law as ‘proper provision’. The sensible and fair approach is to leave the marriage whereby each party has the opportunity to continue on after divorce. This is different for every couple. In the absence of an amicable agreement between two parties, the decision of who gets what becomes an extremely expensive process.

Legislative decisions around the division of family assets should ultimately lie with the judge who can make orders for the sale, transfer of property, periodical payment orders, lump sum orders, and pension adjustments orders, as well as financial compensation orders. Unfortunately the reality is that we are dealing with an overburdened court system which sees many family law cases frequently dealt with on the steps of the court, with hefty legal bills attached.

How to financially thrive after divorce

The next chapter of your life after divorce can be daunting. When you’re ready, believe that you can change your thinking from negative to positive. Understand that you have control over your thoughts. Start there and follow up with a plan, get some guidance from a coach if you can. Positivity is relevant to all aspects of our lives, especially our finances.

Michelle Browne works full-time as a family mediator, based in Co. Kildare. She has clients across the country, and works solely with separating couples to achieve agreements outside of court. Her book, ‘Scars of Divorce’, is on sale now.