What If Your Financial Future Looks Much Different Than Your Soon To Be Ex-spouse’s Future?


By Patrick Janssen

Perhaps the more appropriate question might be not “what if” but “there exists” a difference between my projected financial future and what my ex-spouse can expect. Divorce will almost always reshape one’s financial picture as living expenses tend to double yet income will remain the same at least in the short run. In many cases, one or both spouses will experience future negative cash flow resulting in the depletion of marital and/or separate assets that have been awarded in the separation agreement.

Financial Levers That Can Be Negotiated

Often the financial levers that can be negotiated are marital property division, spousal maintenance, child support (although to a much lesser degree), and extraordinary expenses such as those associated with children or perhaps ex-spouse health insurance. Using each spouse’s income, creating forward looking (post decree) living and lifestyle expense budgets usually through the support of a certified divorce financial analyst CDFA and then modeling various property division, spousal maintenance, extraordinary expense scenarios will reveal what each ex-spouse’s financial future may look like. Obviously, income will be a significant influencer to projected future cash flow, retirement savings and net worth.

Questions to Consider

What happens if I am expected to experience future negative cash flow and my ex-spouse has strong positive cash flow and a very secure financial future? Would an equal division of marital property be ideal in this situation, or shall the spouses consider a disproportionate property allocation to facilitate a potentially better financial recovery opportunity for the lower income spouse? Why would the higher income spouse consider this option? Is there a better solution working with different spousal maintenance options or a combination of both?

Benefits of Collaborative Divorce When Significant Differences Exist

When significant differences exist in the projected financial future, the best approach in negotiating the most appropriate financial settlement option to address this challenge is to work with a Collaborative team of attorneys, facilitator and a certified divorce financial analyst that have been trained in the Collaborative resolution model and have many years of experience reaching settlement that best supports each of the spouses’ goals. In contrast, the traditional approach often leads to a generic settlement that falls short of addressing each spouse’s financial future needs.