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Essay of the Weekend: Is Divorce Just Another Financial Risk?

My husband and I are celebrating our 15th wedding anniversary next week, so it seems strange to write about divorce. But I have often looked at the financial planning aspect of divorce following the “no-fault divorce” in England and Wales. It got me thinking about whether divorce is just another financial risk married couples should plan for, like death or serious illness – or is it different?

I was about six years old when I first learned of the divorce. A friend at school told me she had a “blonde dad and a red dad” and two moms. They all went on vacation together like one big happy family in the summer. I was baffled and intrigued because I only had one set of parents. Why did my friend have two batches? No one else I knew had two moms and two dads.

Even in reruns of Brady Bunch, the classic TV series about a “blended family” of six children, there was only one mom and one dad. The father was a widower, but we were never told what happened to the mother’s first husband. The writer apparently wanted her to divorce, but it was deemed inappropriate for a children’s show when it started in the late 1960s.

When I excitedly told my mom about my friend’s family setup, she explained it to me. My friend’s parents had divorced amicably and had found other partners, who got along well. It may have been unusual to vacation together, but I think it was about bringing the kids into the new blended family arrangement. So instead of seeing life after divorce as a family splitting in two, it was presented as an extension of a family.

Having more people to look after you, take you to different places, and buy you presents doesn’t sound too bad when you’re only six. It seems strange to me now, as I don’t see divorce as something to aspire to, but my younger self found my friend’s family arrangement exciting and I was a bit envious.

I wanted to share this story because it shows that divorce doesn’t have to be ugly and acrimonious, although I guess it depends on the nature of the couple’s relationship and the reason for the separation. I think it would be difficult to separate on good terms if either partner was having an affair, which is why I found the new no-fault divorce laws interesting.

I have a relative who got divorced years ago and had to find a reason why the couple wanted to hang out, just fan the flames. This couple had married young and for a while it worked perfectly. They had a nice apartment, two children, a dog – but in seven years they had grown up and separated.

They had been separated for about a year when they decided to formalize the separation, as they both had new partners at that time. Their relationship was civil at the time, as they still respected each other as parents, even though they were no longer together.

But then the divorce papers fell into the mailbox like a hand grenade. I can still hear the outrage in my relative’s voice upon finding out that her ex was making accusations of adultery, suggesting that my relative’s current relationship started much earlier than it did. It was especially upsetting because my relative suspected it was the ex who had been unfaithful towards the end of the marriage.

Having to decide between them who would “take the blame” for the breakdown of their marriage was horrible, as neither of them wanted to accept that responsibility and it forced them to blame the other. It set the relationship they had as parents back to square one, which couldn’t have been good for the kids.

I think they were finally able to settle for unreasonable behavior, like most couples did, and rebuild their civility. It was never in the same league as the relationship between my friend’s divorced parents.

Lawyers and financial advisers have told me that the new system won’t make every divorce a friendly divorce, and that you can’t assume divorcing couples will have better relationships when negotiating a financial settlement.

One concern is that if one partner considers themselves wronged by the other and they can no longer cite that as a reason for the divorce, they might see the financial settlement as a way to make their ex pay, literally, for their behaviour.

Ceri Griffiths, founder of Willow Brook Lifestyle Financial Planning, told me that if one partner had an affair, for example, that accountability and closure for the other partner is lost in the new system. Maybe not the ideal ingredients for an amicable divorce.

But I can see that the new rules are making a real difference for couples like my loved ones, who had found a way after the breakup, only to blow it up while trying to satisfy the old rules.

I have now written a few articles on financial planning for divorce, including one on the potential problem of trying to find crypto assets and one on whether it is realistic to plan for a divorce. As a result, I began to see the merit of treating the risk of divorce as something to consider, if not entirely plan for alongside other uncomfortable conversations like buying life insurance and coverage for serious diseases. No one wants to consider these things, but discomfort does not negate the need to address them.

You can’t take out a protection policy to cover divorce, but there are things people can do “just in case” to lessen the impact. Things like making sure married couples discuss their finances openly and honestly while the relationship is running smoothly. Even prenuptial or postnuptial agreements have their place – many family lawyers have told me that these are becoming increasingly popular and not just among wealthy celebrities.

Although these agreements are not legally binding, they carry weight with judges if they are entered into freely and if they are fair and reasonable. “The purpose of the marriage contract is to avoid more stress at the time of separation. Not only is financial planning smart before any relationship, but it should in turn make any separation smoother and amicable, as long as both parties agree to the same terms of separation,” says Rachel Murphy, family law attorney at Excello Law.

I totally agree that financial planning is smart when you’re in a relationship. But if my husband had given me a prenup before our wedding, our loved ones wouldn’t have needed fancy hats and fascinators that summer. It would have set off alarm bells for me as I would have questioned Dan’s commitment to me and our future together. If you’re concerned about the financial implications of a divorce before you get married, surely you shouldn’t get married in the first place?

What struck me as even worse was hearing from family lawyers that prenuptials or postnuptials are often initiated by the parents of a happy couple. Fearing that the money they give or leave to their children as an inheritance could end up moving away from the family line in the event of a divorce, they suggest a pre-nuptial to protect these assets.

I don’t come from a very wealthy family, so I accept that not having the burden of generations of family wealth on my shoulders shapes my outlook. The situation can be very different for those who need to protect vast wealth for future generations and, of course, they must do what is best for their family.

But if my family or my husband’s family wanted to give us money or property depending on a pre-nuptial or a post-nuptial, I would prefer that they keep it themselves or do something else. To me, that seems divisive. Even though it would probably be the family acting on legal advice rather than something personal, it would endear me to these parents and create an icy relationship with them in the future.

When I took my wedding vows, my life changed from “me and mine” to “us and ours”. We are united as husband and wife, so we come together. That’s the way it is, regardless of the “what ifs” you might list as potential risks to our union. Anyone who wants the chance to airbrush one of us later can keep racing, even if they come with freebies.

Parents understand this – I’ve been told that some who have shown interest in pre-nuptials or post-nuptials have backed off, preferring to take their chin regardless of the future rather than upset their child or cause a break with the spouse.

There’s something about the potential risk of divorce that makes it unpleasant to plan ahead — it’s not the same as having life insurance to protect a mortgage. My husband and I talked about and planned for many risks, hence the little green box of documents at the top of the cabinet that I wrote about in a previous Weekend Essay. We even talked about who would take care of our kids if something happened to both of us – but we never talked about who would get what if we got divorced.

Probably the closest we get to acknowledging the financial risk of divorce is discussing why it was important for me to continue working and contributing to my pension after we had children. We never mentioned divorce, but I had had a few conversations about women’s wealth with financial planner Mary Waring, who is well known for her message that “a man is not a financial plan.”

I’ve been trying to figure out why I view divorce risk as different and I think it has to do with the “3 Rs” – romance, religion and responsibility. Marriage has its roots in religion and even if, like me, you’re not religious, it brings a sense of moral responsibility – hence the author of The Brady Bunch avoiding divorce from Carol Brady.

Unlike death and sickness, we consider the health of our marriage to be totally within our control. So even though the legal system no longer blames anyone for a marriage breakdown, if it doesn’t work out, it’s easy to think that we, or our partner, have failed.

Victoria Hingston, a family team partner at law firm Payne Hicks Beach, told me that pre-nups or post-nups are beneficial when partners mutually agree to fair terms at a time when their relationship is loving.

“Couples with an agreement are likely to be able to sort out their financial affairs without going to court, which makes the process less acrimonious and their legal costs are likely to be significantly lower,” she says.

I can’t argue with that, but marriage is not a business affair, so defining in advance who gets what if you fail seems unromantic and insensitive – almost like you’re hedging your bets and intending to move on, unscathed.

I’m glad my husband and I have chosen a different path – I think being open and honest about our finances will serve us well enough.

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