Economic Recovery Means More Divorces

On behalf of Jeffrey N. Greenblatt of Joseph, Greenwald & Laake, PA posted in High Asset Divorce on Friday, February 7, 2014.

People in Maryland may have heard about an interesting and unexpected correlation between a good economy and a higher divorce rate. According to a new study conducted at the University of Maryland, the divorce rate slowed substantially during the years of 2008 and 2009, a period of extreme turmoil in the U.S. economy, but then picked back up starting in 2011, when the worst of the economic downturn was over.

But the correlation seems to have very little at all to do with the happiness of a couple, it is really more of a matter of finances. Experts suggest that during an economic downturn people are less likely to get divorced because they simply cannot afford to lead two separate lives or pay for the process.

Whether people can afford it or not, there may be very real disadvantages to going through a high asset divorce during a down economic turn. For one thing, a couple's assets might literally have less value. Couples have property interests in many different types of assets, whether they realize it or not, and in a complex divorce each party is entitled to their fair share of this varied marital property.

This could mean having to sell or divide assets, some of which don't lend themselves to simple splitting. For example, cars, houses, works of art and other physical property might have to be sold in order to divide their proceeds. But in a down economy, these assets might be worth a fraction of what they're worth in a strong economy.

The good news now, though, is that the economy is on the rise, and couples who have waited patiently for the right time to file for divorce need wait on longer. But they shouldn't wait -- the divorce rate is already rising and expected to continue to rise.

Source: Los Angeles Times, "Divorces rise as economy recovers, study finds," Emily Alpert Reyes, Jan. 27, 2014