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Practical Planning Tip: Women and Wealth - Divorce Planning and Investing in Yourself

March 19, 2024

Today we’re going to continue our discussion of women & wealth. Since it is Women’s history month, The videos through the end of March will be on this topic.

After a prenup, which I discussed in the last video, the next important area to keep in mind is Divorce. Over time, divorce laws have become gender neutral. Women are no longer given priority regarding custody. Rather, there’s a presumption of joint custody in many states. Property division is determined based on state laws instead of by title or who earned the money. Spousal support rules vary by state, but may be payable to or from either party, regardless of gender. Most states have a statutory formula for calculating the presumptive amount of spousal support, as well as enumerating factors on which a court may deviate upwards or downwards.

In today’s day in age, a woman may earn more than their spouse during the marriage and have to pay spousal or child support on divorce. In addition, there are usually guidelines governing the duration of spousal support. There’s a trend away from permanent spousal support awards to durational awards. The rationale is to enable a spouse to become self-supporting within the established timeframe. However, in practice, this may produce harsh results for a spouse who’s been out of the workplace for a long time or never worked. In marriages adhering to more traditional gender roles, homemakers may be UNABLE to maintain the marital lifestyle post-divorce under laws that place an increasing emphasis on self-support.

The truth is, there is little financial planning that can be done to protect this type of client who may need to be self-supporting after spending many years as a homemaker. HOWEVER, What I often tell my young female clients in order to ensure a financially secure future regardless of circumstances is to Invest in yourself! It’s of utmost importance to spend the time and money to invest in themselves and their marketability throughout their career. This may mean taking a certificate course, working part-time or as a consultant if full-time is not possible, writing in industry respected periodicals, and staying up to date within trends in their line of work. There is no more POWERFUL tool when it comes to money, than the ABILITY to earn a livable wage. No one can take this away from you, even an unfavorable divorce agreement. Sadly, I can share many unfortunate stories of women who relied on their husband for financial support, but got divorced, and didn’t know how they were going to be able to maintain their lifestyle. This should serve as a cautionary reminder to young women to INVEST IN THEMSELVES PROFESSIONALLY!

You can WATCH the full video here.