Divorce can spark money problems for both spouses

NEW YORK

The multimillion-dollar celebrity divorces get the headlines -- Cleveland Indians pitcher Chuck Finley suing to end his marriage, the estranged wife of former New York City mayor Rudolph Giuliani seeking $1 million a year in support, former GE chairman Jack Welch negotiating a division of his assets with his wife.

But every day, hundreds of marriages break up out of the public's eye, with just as much emotional whiplash and financial pain. The dollars involved may be less, but how they're divided can be critical to how fast -- and how well -- the couple and their children heal.

"The reality of divorce is that couples generally are forced to maintain two households instead of one on the same amount of income," said Violet P. Woodhouse, a family law specialist in Newport Beach, Calif. "Nobody lives as well. Everybody lowers their standard of living."

Increasingly, she added, "they also have to figure out how to pay their creditors."

Roughly half of first marriages end in divorce, according to Census Bureau figures, typically after eight years. But Woodhouse, who wrote the book "Divorce & Money," says she's seeing an increasing number of divorces after 20 or 30 years.

Ginita Wall, a financial planner in San Diego, believes that more baby boomer marriages are breaking up because "divorce is socially acceptable, and more women are earning money on their own so they're not so economically dependent."

That doesn't necessarily make it financially easier, even when the divorce is amicable, she added.

Found a support network

"The bottom line in a divorce is to try to have each spouse suffering equally, with the least impact on children," Wall said. "Typically, he says, 'I don't have enough to live on after alimony and child support,' and she says, 'There he is with half the money, and I have to cover myself and the kids with the other half.'"

For Howard Nash, 43, a New York public school teacher of drama, divorce has been "a financial wringer."

Alimony to his ex-wife, who is a lawyer, and support payments for two children, aged 12 and 9, take two-thirds of his salary, leaving him with $150 a week to live on, he says.

He tries to supplement that with after-school work, and recently began producing low-budget feature films.

"The reason I haven't given up is the support network I've found in film making," he said.

Although divorced for several years, Nash remains dissatisfied with both the financial settlement and visitation agreement but finds himself too cash-strapped to fight them.

"We're both hurt," Nash concludes. "My life is damaged because of the judgment, and hers is damaged because this still isn't finished."

For Reina Lakser, 54, the key to reaching a settlement to end her marriage of more than two decades was getting help from Nancy B. Kaye, a financial adviser in Port Washington, N.Y., who is on the board of the Association of Divorce Financial Planners.

"It was a war -- back and forth, back and forth -- with the lawyers," Lakser said. "Then Nancy got involved. She was the rational voice. She said, 'Here is what you're entitled to, here is what you need to survive, here is how you both can do it."'

Lakser, who works as an office manager near her home on Long Island, said that Kaye helped the divorcing couple work with a mediator to reach a financial agreement both can live with and won't be too disruptive to their children, aged 20 and 17. The deal includes some retirement funds for her.

Kaye believes that more couples should seek professional financial advice before they meet in court in what can result in very expensive litigation.

"Generally, the old rules no longer apply," Kaye said. "Maintenance, or alimony, is considered rehabilitative, so women are expected to go back to work -- even if they've been out of the work force for years. And when you get to child care, nothing is a given. It can cost both parties."

Look at liquidity

She said that one of the biggest mistakes couples make when trying to divide their property is not looking at liquidity.

"Say they try to divide the assets 50-50," she said. "The wife gets the home, the husband gets their $400,000 saving account. Fine. So just how will she support herself that way?"

Kaye argued, too, that sometimes a 60-40 split would be more equitable "when you consider the impact on your cash flow today, and what it's going to look like five years from now."

Kim Lurie, who spent eight years fighting for her own divorce, used the experience to start a company called Divorce Coach in Merrick, N.Y.

"I found there was a big piece missing in the divorce process, which was a place to seek help on what to do, when to do it and how to do it," said Lurie, a 42-year-old attorney. "I try to guide people through the process and stay with them through the proceedings. Sometimes it's just answering questions like, 'My attorney said this. What does it mean?"'

Those who succeed in overcoming divorce, she believes, "accept the injustice of it all and move on to recreate their lives."

Ruth Weisberg, 45, says that at the start of the divorce process, "I felt like I was front and center on the Titanic."

Weisberg, who lives in suburban Philadelphia, and her former husband worked out their settlement with the help of a mediator.

In the end, they sold their home and each moved to a smaller house. She traded down from a minivan to a small car. She gave up a regular job as a radio show host to do free-lance work so she would be more available for her children, a daughter aged 12 and a son, 6. She jokes that she buys "only at the finest thrift shops."

Weisberg says the key is to look forward, not back: "You have to put your life together, you have to get on with it."