Last time we wrote about how it is a tough time for some in Texas to go through divorce and property division because of the weak economy. Over the last two posts we wrote about how houses have become liabilities instead of assets for some and we wrote about how divorcing couples can address the division of assets like retirement accounts. In this post we will write about how the current financial circumstances are changing the way some couples divide assets.
The tough economy has made for recent swings in the stock market and the value of investments have been similarly affected. The instability in the economy and the markets has made many divorcing couples rethink their strategy in dividing their assets. According to a leading family law attorney based in New York traditional schemes of asset division have been set aside over the last three years.
Before the economic downturn, high-earning spouses generally negotiated to have their former spouse take the house and other safe and low-earning investments while they negotiated to keep the high-earning and risky investments like stock options, hedge funds and their own business if self-employed.
Since the economic crisis began divorcing couples, especially divorcing couples with children, have started to share the risk more evenly. In today's economy, spouses are trying to share the risk by splitting the safe, low-earning investments and the riskier, high-earning investments.
The volatile market has also led more couples to come to agreement outside of the courtroom because individuals would rather retain more control over their financial future than put it in the hands of a judge in a time already full of uncertainty.
Source: The Wall Street Journal, "Divorce: Who wants the house?" Kelly Greene, October 1, 2011