How to avoid ‘financial destruction’ by planning for divorce

Baby boomers are No. 1 group separating from each other

According to Government statistics, the bulk of divorces filed is between Jan. and Mar. Still, the over 50 percent divorce rate is now null in void as a generation who had the belief that half of all marriages usually end in divorce is now a thing of the past.

DETROIT – Most divorces are filed between January and March, according to statistics from the government.

The belief that more than 50% of marriages end in divorce is no longer accurate. The number of divorces are now under the 50% threshold. However, many divorces still end in bitterness so you should be prepared.

“The number one threat to a person’s financial well-being is divorce,” said Certified Financial Planner Rick Kahler. “Divorce is a financial destruction event for both parties.”

The Census Bureau says gray divorce (baby boomers) is the number one group separating from one another. Kahler says the divorce landscape is changing.

“Couples therapy, therapy can be expensive, but nowhere near as expensive as divorce,” Kahler said. “So it makes a lot of sense of pay some attention to this: gray divorce can be especially disastrous.”

There are four kinds of divorce:

  • Do it yourself divorce, which is not recommended
  • Litigated divorce where the attorneys duke it out
  • Collaborated
  • Mediated

“You and your spouse may be a good fit for mediation or collaborative divorce, which is a much more family-focused, amicable separation,” Certified Financial Planner Julie Quick said. “It’s not for everybody, but I think a lot of people don’t look to those other methods as a possible solution for themselves.”

If you find yourself in this bad spot, though, setting aside emotions and digging into advance planning is vital, says Credit Expert Beverly Harzog.

“You want to be sure that you’re developing your own credit, you know, so that you know after a divorce or you know sometimes the spouse passes away, you are kind of in a similar situation, you know,” Harzog said. “Have your own credit so that you don’t have any financial setbacks. You can keep going because you’ve got good credit in your name.”

Planners will tell you that final consideration is getting real about knowing your expenses post-divorce. The increased costs can be a real eye-opener and devastating too. Having good financial advice is the best option.

About the Authors:

Rod Meloni is an Emmy Award-winning Business Editor on Local 4 News and a Certified Financial Planner™ Professional.

Brandon Carr is a digital content producer for ClickOnDetroit and has been with WDIV Local 4 since November 2021. Brandon is the 2015 Solomon Kinloch Humanitarian award recipient for Community Service.