We know quite a few people who have divorced, and their experiences vary widely as you probably would expect. Another person we know is getting divorced and is asking for advice beyond what will be received from paid mediators, arbitrators, lawyers, and the courts.
After researching more and thinking more about divorces we know, we're unable to find many specific formulas for dividing marriage assets beyond the general 50-50 community property split many states require.
Nevertheless, I'm thinking there should be some general principles. For discussion, here are some. What do you think? How would you modify them to be the most fair and equitable? All of these in effect are prefaced by "IN GENERAL, AS A STARTING POINT FOR FINE TUNING:"
1. Husband and wife property should be divided as close as possible to 50-50, i.e., half to each.
a. Many states apparently start with this principle. This gets challenging if, for example, a young woman marries an old rich man and divorces him after only a year or two.
b. Sure, prenups probably would negate gold digging in a savvy union, but lots of unions are not that well thought out.
2. Children should be provided for until age 18, i.e., until completing high school or equivalent. This supposes children are NOT owed any college education or post high school training by their parents. Some people think children should be supported until age 21. What do you think?
3. Any alimony (allowance for living expenses from one spouse to the other) should start at the effective date of their living apart and terminate after the years in divorce equal the years in marriage, e.g., if married 12 years, alimony for no longer than 12 years.
a. This fundamental fairness negates controversial issues about paying alimony for life and questions about remarriage or cohabitation.
b. For example, if a husband and wife divorce after 10 years of marriage, with no children, and he makes $40,000 a year and she makes $80,000 a year, she would pay him $20,000 a year (so they both would have $60,000 a year) for 10 years and no longer, no matter whether either remarries or lives with anyone else.
4. Both parties must expect the reverse of the synergy achieved by marriage, i.e., if 1+1=3 in combining assets through marriage, divorce will feel like less than the 1 each partner contributed to the union. This often means the primary residence must be sold with both husband and wife then relegated to smaller houses, condos, or apartments.
5. For child asset percentage allocation, generally consider 10% per child up to five children. For example:
a. Husband 50%, wife 50%
b. Husband 45%, wife 45%
One child 10%
c. Husband 40%, wife 40%
Two children 20% (10% each)
d. Husband 35%, wife 35%
Three children 30% (10% each)
e. Husband 30%, wife 30%
Four children 40% (10% each)
f. Husband 25%, wife 25%
Five children 50% (10% each)
6. Child custody (until the child reaches age 18) thus alters household percentages like these examples:
a. Husband custody of two children
Husband 60%, wife 40%
b. Wife custody of three children
Husband 35%, wife 65%
(1) For easiest visualization, if the husband makes $100,000 a year and the wife has no income, if she gets custody of their three children, he would be paying her $65,000 alimony a year and he would retain $35,000 a year.
(2) If the husband got custody of two children and the wife custody of one child, he would retain $55,000 a year and the wife $45,000.
c. As each child reaches the age of 18, the 10% for that child reverts to 5% added to each parent's settlement as part of the general 50-50 split for marriage assets that was used as a starting point before considering children of the marriage.
(1) For example, when the oldest of the two children living with the father reaches 18, the father's $55,000 a year decreases 5% to $50,000 a year while the mother's $45,000 increases to $50,000 since each has one child still in his or her custody.
7. The 50-50 initial property split would be as of the effective date of the divorce. Usually this requires selling the house or one spouse buying out the other spouse's share in the overall settlement.
8. The alimony would be determined by the average of the family's gross annual income for the past five years as shown on their federal income tax returns. For example, $50,000 + $60,000 + $45,000 +$75,000 +$90,000 = $320,000 / 5 = $64,000 to be the base figure for computing annual alimony for as many years as the marriage lasted.
a. For example, this $64,000 would be $32,000 each for husband and wife in the initial 50-50 division.
b. Any children would alter the alimony 10% each depending which parent had custody, e.g., one child living with the mother would be (see 5b) father having 45% ($28,800) and the mother having 55% ($35,200).
9. Although either party could apply or file for readjustment of alimony after the divorce, generally these principles would prevail as fairest to all concerned for the rest of their lives. Assets such as property or income acquired after the divorce should NOT be retrofitted into the divorce settlement, i.e., neither party could draw additional resources from the other that were gained after the split.
What do you think? Based on your experience with divorces, either personal or with friends or family, are these principles reasonable or unreasonable? Which if any should be changed, and how? What others would you add?
