Financial Implications of Divorce
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Anonymous
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I fear that I am reaching my limit with my husband and starting to realize that I need to seriously consider divorce. Our marriage has been in a horrible state for years, but I had committed myself to making it work (or more truthfully, keeping it going) because we have kids and because I felt that it made more sense financially. Lately though, I feel as though I can't hold on, so I am trying to get a sense of what the financial implications will be if we divorce.
We have been married for 15 years and I have been the primary earner the entire time. Over the course of the 15 years, my husband has had maybe 3 or 4 years when he has earned about $30-35K; all other years he has basically had negligible income. I knew when we got married that I would always be the primary breadwinner and had no problem with that, especially because he was the one much more excited about having kids and we agreed that he would be a stay at home parent. That changed when our first child was about 3 months old, at which point my husband said that he 'couldn't do it' and I started paying for child care. When he is earning money, he never offers to contribute to our expenses beyond everyday cash transactions. We are in Virginia and my internet research seems to indicate that marital assets are divided 'equitably' rather than 'equally', but I am not sure what that would mean in our case. I have worked very hard to create financial security for my family and I have zero faith that my husband would be at all responsible with whatever he would get in a divorce settlement. He doesn't believe in insurance or saving money. His very small retirement accounts exist only because I essentially paid for them. We have invested considerable resources into several of his business ideas, none of which has panned out. One of my recent last straws is that after starting a new job, he is refusing to contribute the maximum allowed to his 401K, despite the fact that we do not need (or use) his income to cover our expenses. This post is getting long (sorry!), but I am just wondering what I should expect would happen given our financial situation. I am a GS-15 level fed. We currently have a net worth of about $1.4 million made up of the following. - We have one joint savings account. We each have our own other checking and savings accounts. I pay all credit cards, medical bills, subscriptions, insurance, etc.... We both pay for incidental life expenses like groceries, gas, restaurants, etc.... - most of which we do in cash. - I have a couple of 401K accounts and a TSP account. He has a 401K account. - We each have a Roth IRA, though I have made all of the contributions into each. - We bought a house in 2010. Mortgage in my name. Title in both of our names. I made the downpayment and make all mortgage payments from my account. - We have three kids and a 529 for each. Again, all contributions have come from my account. I know that I need to contact a lawyer if I am really serious about getting out of this marriage, but I am just trying to get a sense of what to expect financially. Appreciate any knowledge or experience that you can share. |
Anonymous
| Divide it all in half (although you can probably leave the 529s out of it). You will pay him child support and maybe alimony. |
Anonymous
Really? So what is the meaning of equitable versus equal? Or is my research wrong? |
Anonymous
| Who gets what can get negotiated but he is entitled to half. |
Anonymous
Okay, thanks for the feedback. I guess that I just have to let it go and hope for the best. I want us both - and our kids - to have a good life and be secure - maybe he will surprise me if I actually go through with it. |
Anonymous
You sound like me. I've spent the past 2 years getting our finances to a much better place so that when we do split (and it's coming very soon) we will each be in a good position to live comfortably with little impact to the kids financially. I'm in a bit better position than you since our HHI split is me 55/45 him -- so if things have to get split 50/50 that's not a whole lot for me to have to give up. The thing I will negotiate is the retirement accounts. He has a pension that will give him monthly payments when he retires, but it probably doesn't occur to him that I could say I want half of those payments when they start up. I know he will hate the idea of sharing the pension so that will be my leverage to not split my 401k or his other retirement savings. My kids are college/late HS so the only support I want there is half the college expenses, no everyday child support. |
Anonymous
| I know this isn't helpful but man, why did you marry him? |
Anonymous
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You will likely have to divide everything 50/50. All marital assets and property. You might be on the hook for temporary alimony until he can get himself up and self-sufficient.
You "could" fight for more, but my husband just fought for half, and spent more than $30,000 in attorney's fees. In Virginia. So it might be best to cut and run now, while he still has time to figure out how to earn a living. Don't be like my aunt and uncle, who waited until they were 55 before divorcing. My uncle had to support my aunt with alimony until she became eligible for Social Security. |
Anonymous
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Yes, as the PPs said, it's not relevant that you were the one contributing to the accounts and he was not. I mean, flip the script, how many women who did not work would be totally screwed if divorce settlements were based on the proportion of savings/investments each individual paid?
A friend in a similar situation just went through a divorce, and her lawyer advised her that it's almost always less expensive (in terms of money and personal heartache) to pay up rather than fight. Her husband got a very nice settlement and alimony. She initiated the divorce and is pretty happy now, but mostly because she could afford not to worry about how much it cost. |
Anonymous
+1. Is there "lessons learned" advice you can share with us about things you would have done differently? All women could benefit. |
Anonymous
Love makes us do stupid things. One of my friends is married to a guy with no job. He had no job when they were engaged either though he claimed to be 'looking'. He moved into her house - again didn't help with the bills. 3 years later she's trying to divorce him. |
Anonymous
| Don't forget you'll have to split the value of the FERS pension. I could see the valuation method getting contentious. |
Anonymous
+1 My best girlfriend learned this lesson the hard way. She was completely delusional (despite everything that we plus her attorneys told her) and felt that her being the breadwinner entitled him to less than half of the "marital pot of money." Take your increase in net worth over the course of the past 15 years of marriage, divide it in half. That's what he will get. You will also possibly pay him child support plus alimony, even though he's a deadbeat. Also, he will also likely be entitled to a large portion of your pension when you retire. Don't want that? Fine, then you'll have to pay him significantly more than half of the assets when you divorce. That is what they mean by "equitable". My Aunt divorced a total and complete deadbeat. As in, she had a job at a hedge fund making about $400,000/year, while he refused to work. He was a lousy SAHD, and he smoked pot all day in their backyard while she worked. He was abusive and hit her, there were hospital records from when he broke her rib. She still had to pay more than half of their assets so that she could avoid paying him ongoing alimony. It did not matter that he hit her, cheated on her, and did drugs. The absolute most miserable divorcees I've ever met were female breadwinners. They spend most of their marriages unhappy to be providing for an man, and the final insult comes when they have to pay half of what they view as completely theirs on the way out the door. |
Anonymous
| ^ I forgot to add, you'll also have to pay for his legal fees. |
Anonymous
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OP here. This was the harsh reality that I was looking for, so as much as I hate to hear it, thank you.
And thanks for those who mentioned the pension. I actually think that I would probably want to negotiate a larger portion of the pension and less money now, as what I am really worried about is that he will not manage the money that he has very well. When I try to talk to him about retirement, he genuinely believes that our kids will support him - there is some cultural aspect there, but it just kills me. And, assuming I am still alive, I would never let that happen (unless one of my kids becomes crazy rich for some reason), so it will just mean more money out of my pocket. So maybe a smaller settlement now and bigger piece of the pension would make sense? |