For Richer...and Poorer
13 January 2012
Northern Lifestyle Magazine
13 January 2012
For richer...and poorer?
Divorce rates are rising, making the need for an experienced adviser more important than ever. By Simon Preston, Head of Divorce and Family Department in the Leeds office of Stewarts Law.
According to the latest figures from the Office for National Statistics, divorce rates rose in 2010 for the first time since 2003 as 119,589 couples parted - a five per cent increase on the previous year.
The figures are surprising. Divorce rates peaked in the 1980s and have been in overall decline ever since. Until now. What can we read into such statistics? Many have been quick to blame the recession, citing money troubles as being a key factor in divorce. Certainly financial pressures can be the final straw for a creaking relationship and the onset of recession in 2008 might reasonably be expected to result in these breakdowns two years later. On the other side of the coin are the couples who cling to one another in difficult situations, relying on each other's support. If that support is not there then that is when someone may take a long, hard look at the relationship. Others have undoubtedly seen opportunity. Some individuals may believe they will secure a more favourable divorce settlement if their income is currently low or the value of their business depressed. This should sound alarm bells.
Divorcing within an economic downturn requires careful thought and analysis. The proper identification and valuation of assets, be they businesses, trust holdings, properties or otherwise, is crucial, as is the ability to look beyond the short term. Sudden downturns need to be treated with real caution and analysed before long term decisions can be made. Too often the "divorce downturn" in fortunes miraculously reverses within a surprisingly short time. We have seen it time and time again. The ability of advisors to interpret and apply analysis to achieve proper long term outcomes is more important than ever in the most difficult times.
All is not doom and gloom however.The average length of a marriage continues to rise, now to 11.4 years from a low of just 8.9 back in 1985. That at least offers some comfort against the 'seven-year itch' theory. Similarly, a fifth of 2010's divorcees had been divorced before which at least shows there is a willingness to look for romance and life.