The story is being played over and over in Courts around the country.
The economy has nosedived, and things are getting worse day by day. The baby boomer couples who have been raising a family, amassing savings, investing in the stock market, building a portfolio of real estate, setting aside earnings in 401k's, building businesses and planning for their future, are now joining the ranks of the divorced.
There is however a new "fly in the ointment". What to do when the "depression like" recession creates a state of near poverty, after having spent years working, saving and investing to make millions during their marriage, only to watch it vanish into thin air.
The throngs of New Jersey couples in broken marriages now find themselves fighting the economy in addition to each other as they try to distribute negative equity from their homes and disintegrating bank accounts, mutual funds, and 401k's. The art collections and coin collections have plunged in value. The 529 College accounts for the children are not sufficient to fund even the first semester at the community college. Couples with the most amicable intent as to fairly and equitably dividing estates have had to redo the math when asset values proved less than they had counted on to split up.
Those couples that have already gone the distance are racing back to court, in many cases before the ink has even had an opportunity to dry on their Property Settlement Agreement to ask for modifications of their alimony, child support and college funding obligations. Others have elected to remain in bad marriages rather than locking in those "paper losses" of assets to be divided, lose their years of appreciating real estate equity, or even worse, seriously consider the option of foreclosure, short sale (if it can be had) and the ultimate in financial suicide-bankruptcy.
The economy's capitulation, most notably in the financial, banking and investment-industry, with its downsizing has created a new breed of unemployed and underemployed professionals seeking to minimize alimony by claiming their plunge in fortunes is neither temporary nor likely will it be short-lived.
The upside if there ever is one in the break up of a marriage, is in the fact that for the first time since the Great Depression, if you as the breadwinner or your employer has been a casualty of the economic tsunami and its downturn, it is a good time to get divorced. You can come to Court with a compelling argument that you can no longer earn what you had earned. You're marital standard of living cannot be replicated post divorce, because at no fault of your own, it cannot be maintained even if you were to remain married. The Court is far more likely than in any time in decades of hearing pleas of unemployment and underemployment to accept the truths of economic devastation and to rule begrudgingly on the present economic facts powerless to impute income that neither exists nor likely to return any time soon.
If you were earning a $100,000 a year salary and averaging one million dollars a year in bonuses and now as a result of the economy, your million dollar bonus has evaporated, what is a judge to do? This question is being played out in court rooms throughout this country and this State of New Jersey.
Setting support levels is even more difficult a task when both spouses are unemployed or underemployed and work in an industry with widespread cuts in jobs and pay.
The spouse who is financially situated to buy the other out of his/her share of the marital residence is likely to be the recipient of a windfall in future years. A home that has gone from $1,000,000, pre-real estate bust, to an appraised value in today's market of $675,000.00, if held long enough after the buyout will likely bring unprecedented profits to the spouse retaining the property. A spouse with title to a business, is more prone to calculate a quick buyout for the other spouse's share when the business will be valued at its lowest level.
The Standard & Poor's 500 Index has fallen almost 40 per cent in 12 months; the housing market continues to be in free fall; partnership distributions and bonuses have withered; and the collectibles market has plummeted.
Resulting disparities in asset valuations make outcomes virtually unpredictable. Formulas taking into consideration disparities of incomes between the parties have also become more about predicting when, rather than if, a post judgment modification of alimony and child support will occur.
The old saying "It's cheaper to keep her", may no longer be relevant.
