Money, Marriage & Divorce
For anyone who works with divorcing couples, the fact that money often plays a major role in either the deterioration of the marriage which leads to divorce, or in the acrimony that causes roadblocks to getting through the divorce process (or both), comes as no surprise. We often hear statistics, such as that 50 percent of all divorces are due to disagreements about money. And while I have never been able to find a concrete study to definitively back up that claim, I would bet that if you ask any divorce practitioner how often money and/or family finances plays a role in either the decision to dissolve a marriage, or in the difficulty of coming to an acceptable settlement, the answer would likely be a much higher percentage.
Most people would agree that communication is paramount to a successful marriage, and communication around money and financial issues is no different. In fact, according to some studies, honesty around financial issues might be more important than honesty around the other issues couples face. A 2011 Lawyers.com Couples-and-Money Survey1 revealed that 40 percent of Americans agree that honesty about finances is more important than honesty about fidelity; yet, nearly three in ten (29 percent) admit that they have withheld information from their spouse or partner regarding their spending on discretionary items.
That same survey also showed that nearly all Americans in committed relationships (91 percent) agree that it is important to discuss their partner’s financial history before marriage, yet more than one quarter (26 percent) admit that they tend to avoid talking about finances at all.
To further illustrate the point, an online poll commissioned by ForbesWoman and the National Endowment for Financial Education (NEFE), and conducted by Harris Interactive2, surveyed 2,073 U.S. adults from June 28 to 30, 2020, and found that 43 percent of those who combined finances had admitted lying to spouses about money. A similar number (42 percent) admitted that they themselves had been deceived about money.
When taken in context, the picture that all of these statistics paint is one where trust can quickly become eroded and couples can find themselves facing the prospect of divorce. And whether money and finances were the root cause of the breakup or not, they quite often become sticking points in the actual dissolution of the marriage.
If a couple has trust and communication issues around money during the marriage, you can imagine just how difficult it is to put those aside during divorce, in order to come to an acceptable financial settlement when dissolving the marriage. Add to that the fact that during many marriages, you have one spouse who may have taken a back seat in the management of the family finances for various reasons, which can create a power imbalance around money and finances. This can further erode trust between a couple, and it becomes easy to see why these financial issues often cause such strong barriers to getting a divorce proceeding over the finish line.
This is where alternative dispute-resolution methods for divorce, such as mediation or collaborative divorce, can be such powerful tools to help couples work through the financial issues they face. Because these methods put the power to come to an agreement back with the couple themselves, and, particularly in the case of collaborative divorce, emphasize open communication around the issues that come up during the proceedings, the likelihood of a positive outcome for both parties is greatly increased.
The actual number of marriages that fail due to money issues may be up for debate, but there is no question that money plays a large role in creating tension between married couples, and certainly creates barriers for couples going through divorce. Communication is paramount to be sure, and the earlier the better, since only 51 percent of couples discuss how they will manage their money before tying the knot, according to one survey. However, if you’re already one of the 49 percent who didn’t, or find yourself in the unfortunate situation of facing a divorce for whatever reasons, be sure to do the research on the various methods of going through the proceedings, to ensure that you give yourself the best chance of reaching an outcome you can be comfortable with as the years go by.
2 https://www.nefe.org/research/polls/2021/financial-infidelity-2021.aspx