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July 02, 2015 at 08:56 AM
A December 2014 story from The New York Times concluded that the divorce rate in the United States has fallen off. Justin Wolfers, a University of Michigan economist, wrote that the divorce rate peaked in 1981 at 5.3 divorces per 1,000 people. It’s steadily fallen to 3.4 divorces per thousand in 2012 (although that excludes data for California, Georgia, Hawaii, Indiana, Louisiana and Minnesota), the latest data available from the Centers for Disease Control and Prevention and the NCHS National Vital Statistics System.
Wolfers noted, though, that the marriage rate has also fallen over the same period. If fewer people are getting married, naturally, fewer people are getting divorced.
“But even measuring divorces relative to the population that could plausibly get divorced—the number of people who are married—shows that divorce peaked in 1979, and has fallen by about 24% since,” Wolfers wrote.
A more recent trend is that of women becoming the primary earners in their households. However, many of those higher-income women are still leaving financial decision making to their husbands or partners. A 2012 Prudential study found 22% of married and partnered women earn more than their partner, but only 19% make most of the financial decisions. A UBS survey in 2014 found that while some decisions are shared—real estate and large purchases, estate planning and college planning—investing is largely the man’s domain in most couples.
That means women who are divorcing need to be proactive in improving their investing skills and financial literacy.
“I still find that women, even if they are the primary breadwinner, their financial knowledge in terms of their own assets and income and so forth, they’re not as knowledgeable as they should be,” Leslie Thompson, managing principal and co-founder of Spectrum Management Group, told ThinkAdvisor on Tuesday. Thompson is a certified divorce financial analyst.
“When going through a divorce, whether you’re the primary earner or not, it’s really important that both parties really but the woman especially has a great handle on all levels of finance, especially if she’s delegated it to her spouse,” Thompson added.
Before she even hires a divorce attorney, a woman needs to get a deep understanding of all of her assets, her sources of income, retirement plan and credit situation, Thompson said. She should also consider adding a tax planner or CDFA to her team.
“Often attorneys, while they certainly understand the legal aspects of divorce, from a tax [standpoint] they don’t really pay a lot of attention to the ramifications of splitting the assets. Having a knowledgeable CPA or a certified divorce financial analyst is helpful,” she said.
