Divorce is More Difficult and More Likely for those who make Less Money
Low-income families who are facing divorce are probably going to have a more difficult time with the process than those who make more money, according to financial analysts.
And because low-income couples have less money, they need to be even more careful about how to handle it during the split, said Linda Leitz, the founder of Pinnacle Financial Concepts, Inc., and the author of “We Need to Talk: Money and Kids After Divorce.” “The less money you have to divide, the more important it is to divide it right,” Leitz said.
The lower the income, the harder it is to find information about divorce, according to results from a poll conducted by GFK Roper Custom Research. Divorced Americans who made less than $50,000 were more likely to say that the one most difficult part of the divorce process was getting information.
The poll, commissioned by www.Wevorce.com, also showed that divorced Americans who made less than $50,000 per year were almost twice as likely to say that it was difficult to understand legal advice. The poll was conducted by phone in September 2007. More than 1,500 people participated in the study, and the margin of error is plus or minus 2.6 percent.
To compound the difficulties, these are the people more likely to be divorcing. The probability of divorce is higher for those who make less money, according to statistics from the National Center for Health Statistics. A couple making less than $25,000 per year is more than twice as likely to divorce than a couple making more than $50,000 per year, according Cohabitation, Marriage, Divorce and Remarriage in the United States.
“Low-income families have a tougher time finding information about navigating the divorce process because they are not going to pay to get professional guidance”, Leitz said. “For example, reputable, honest, talented attorneys in her area may not accept a case without a retainer in the neighborhood of $2,500”, Leitz said. “So the ability to go in and get just enough information to know where to go, they may have to cough up a check for a retainer,” Leitz said.
Most referrals to Leitz’s office, she said, come from referrals from other financial planners, a service a low-income family is less likely to employ.
“People often turn to their friends, colleagues or family members for referrals when they are trying to find help with their divorces”, Leitz said. “Low-income families’ peers are also not likely to be able to provide referrals because they are not paying for professional guidance”, she said.
PROCESS IS DIFFICULT
“Without that professional guidance, couples with less money are more likely to try to navigate the divorce process alone, which is a daunting task”, said Barbara Shapiro, vice president of HMS Financial Group, and regional director of the Institute for Divorce Financial Analysts.
“People with less money do have a great deal more difficulty getting divorced properly than wealthier couples,” Shapiro said. Shapiro is one of the first certified divorce financial analysts in Massachusetts.
“Low-income couples trying to find a way to divorce without professional help might lead to even more confusion because the forms they get from the court system can be confusing, and they would have no one to ask for advice or explanations”, Shapiro said. “Trying to pay for advice from an attorney might be financially impossible.”
“Generally, it is easier for couples with higher incomes to get through the divorce process because there are more possibilities for making the finances work between the two people”, Shapiro said. “The greater the number of assets the easier to come up with creative solutions because there are more pieces on the board to move about,” she said.
EDUCATION PLAYS A PART
Education may also play a part in why low-income couples have more difficulty. The lower the income bracket, the less likely the couple is highly educated, said Stacy Francis, president of Francis Financial, Inc., and a member of the board of directors for the Financial Planning Association. “Often you are dealing with a less educated audience,” Francis said. “You look at the statistics, and those individuals who make less than $50 thousand are less educated than those above it.”
“That translates to less sophistication and understanding when it comes to financial issues”, she said. Francis founded Savvy Ladies, an organization that helps women take control of their finances. “The difficulty low-income couples face is compounded when they attempt to divorce on their own without an advocate or a professional of some kind”, Francis said. “Many of them are having to do do-it-yourself divorces,” Francis said. “So the real burden of educating them on this whole process is really just lost to them. And as you know, the divorce process can be pretty tough to navigate on your own.”
HOW TO FINANCIALLY SURVIVE
“If a low-income couple is barely able to eke by financially, splitting the household in two may be impossible”, Shapiro said. Barring an abusive relationship, she would recommend seeing if it is possible to find a way to live together to keep the finances intact. “Unless there is abuse, from a financial perspective these couples might be better served if they try to work out some sort of coexistence,” Shapiro said.
Finding a way to work together amicably can make the process easier and less costly, said Francis. “We find that individuals who are collaborating, working together, are having a much easier time to divorce,” she said.
By working together, the divorce takes less time, costs less to complete, and the couple is happier with the outcome, Francis said. One way Leitz recommends finding professional advice while keeping the costs down is to look for a financial planner who will provide a consultation. Lietz’s office gives new clients a consultation meeting for $200 that includes information that she calls Divorce 101, basic guidance on how the court system will work, and the best way to split assets.
She said many people take that one-time consultation and go on to get divorce services for low-income families because they become armed with enough information to separate their finances. “But in the end”, Leitz said, “low-income families usually have a harder time adjusting their finances after divorce. I think they do because whether or not they make wise financial decisions, it’s going to be hard financially for both of them,” Leitz said. “They will feel the financial pinch more acutely.”
About the author: Michele Bush Kimball has a Ph.D. in mass communication with a specialization in media law. She has spent almost 15 years in the field of journalism, and she teaches at American University in Washington, D.C. She recently won a national research award for her work. She can be reached at m.kimball@Wevorce.com.
