When Sharon Chayra was facing her second divorce
at 49 and with three children, she panicked. Her first marriage ended quickly and painfully, after just one year, when she was a pregnant college dropout. That was bad enough, she said. Her second marriage had lasted 20 years before she moved out of the house in 2010. But when it came time to go to court, she realized the experience would leave her bankrupt.
"My request for an amicable split turned into 'War of the Roses' at the last minute," she said. Her husband, a 54-year-old paramedic, put a second mortgage on their house and hired an attorney to fight hers. None of this, said Chayra, has been easy on their two sons, who are 11 and 17. Her daughter from her first marriage, now 27, had moved out of the house before the trouble started.
Already owing plenty to an attorney, and fearing additional legal fees would destroy their nest egg and her healthcare business development firm in Las Vegas, Chayra declared a "truce" and is now in separation limbo. She plans to finalize the divorce when she feels more financially stable, perhaps at year's end. "It's unfair to everyone to be in a state of suspended animation," Chayra said.
As Chayra's case illustrates, repeat divorces can be complicated and financially more detrimental than first divorces.
There is an unfortunate dynamic in repeat divorces because they compete for resources that the first divorce is still consuming, experts said. Even after the $10,000 to $20,000 cost of a contested divorce, there are often lingering child-support costs and alimony, plus the hit of split retirement assets and paying taxes on capital gains from selling assets.
Yet the odds are that if you have been divorced once, you will divorce again, said David Pisarra, a Santa Monica attorney who practices family law. Oft-cited statistics paint the national lifetime probability of divorce at 50 percent for first marriages and at 67 percent for second marriages. For a snapshot of just one year, the National Center for Family and Marriage Research at Bowling Green State University in Ohio analyzed 2010 data for Reuters and found that the overall divorce rate was greater for second marriages -- 17 out of 1,000 for first divorces and 24 out of 1,000 for multiple divorces.
Making matters worse has been the recession, observes Lynne Gold-Bikin, a family law attorney in Norristown, Pennsylvania, because people have fewer assets to split. "Everyone's investments have gone down, and the value of houses dropping has really skewed the whole distribution of assets."
The shrinking of financial portfolios has made it especially tough for spouses who wind up paying child support for children from multiple marriages. Depending on the state, courts can look at what money is available for support without taking into consideration the adult's other financial obligations. A twice- or thrice-divorced individual could easily have very little left over, especially if they are also paying alimony to multiple ex-partners and splitting up the assets.
All about the prenup
Because of everything that can go wrong if a second marriage fails, lawyers stress the importance of signing a prenuptial agreement, whether you are a multimillionaire film actor like Tom Cruise, or merely a nonfamous moviegoer who enjoys Cruise films.
"I've done prenups for people who really had nothing," said Janice Boback, a family and matrimonial lawyer in Chicago. "Some people just want a 50-50 division and say, 'let's just deal with it now,' and that's not a bad idea."
True, it can be difficult to imagine even broaching the topic to a future spouse, but Boback said it can save money in the long run. "When people get angry, reason goes out the window. And who gets the money then? We do."
Gold-Bikin recommends creating a contract that states what assets each party has going into the marriage, what assets each party will have if it ends, and if there is an income disparity between the two, how much the lower-income spouse will be receiving. A spouse with children from previous marriages may also want to designate some inheritance protections.
Of course, one might be tempted to forget about prenups and the second or third marriage altogether. Just live together without the vows.
That may turn out swell if you are both earning about the same amount of income. Boback cautions, however, "It's good for the person with all the stuff -- and money. But the person who takes care of the home or kids and has nothing of their own after, say, 10 years of living together and then splitting up? They're out of luck."
Splitting assets
Although prenups are ideal vehicles for making a second divorce go more smoothly, lawyers say they still see plenty of couples going through a second divorce without the prenup.
For people in that situation, Boback recommends collecting paperwork -- anything that shows what was yours at the start of the second marriage (with any luck you have been doing this all along). Then do a full analysis of your debts and liabilities, which is what Chayra did -- reining in her emotions and taking a good hard look at her portfolio -- before putting a temporary halt to her second divorce.
She decided her goal was not to obtain every dime she might have been entitled to, but simply to avoid being financially wiped out. "Be clear in your overall strategy but be willing to yield," Chayra advised "Money isn't everything when it comes to your health and happiness."
Gathering financial paperwork, especially if you are happily married, may sound daunting, but as Boback notes, "Most people keep a scanner on the desk, and they scan any important financial documents into the computer. They're often very accessible electronically, these days, which can help if things get really messy."
Long-term planning
One bit of solace for anyone struggling through a second divorce, or even a fifth: You probably will not lose a dollar of your Social Security income. If you are divorced and not remarried, but your marriage lasted 10 years or longer, you can receive benefits based on your spouse's record, even if that spouse has remarried and even if that spouse has not filed yet for his or her own benefits.
And when splitting up assets, consider that what you pass on might be more important in the long term than what is going on right now. Peter McAlevey, a movie producer and former Walt Disney Studios vice-president, fought his wife over their Malibu, California, house during his second divorce. He finally suggested that they dole out the pain equally: Sell the house and put the profit from the sale into their two teenagers' college funds. She agreed.
"I do think there are relatively sane outs to all these problems," said McAlevey. "You just need to be creative about it."
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