I recently helped two couples with major financial concerns work out ways to improve the situation and to stay married. As with many couples, money had either already become or was poised to become a major issue that was threatening wreck the marriage. So what are some alternatives to divorce?
On a relationship (non-financial) level, there is couples therapy, marriage counseling and the like. Sources of this help can be:
– Licensed Marriage and Family Therapists (LMFTs);
– Licensed Clinical Social Workers (LCSWs);
– Psychologists and psychotherapists; and
If finances permit, often it’s helpful for each spouse to receive individual counseling / therapy and for the couple to receive couples therapy.
When the relationship is already on the brink, discernment counseling may be helpful.
Financial issues have been the ruin of many couples. Sometimes one spouse is a saver and the other a spender. Or one spouse is a risk-taker and the other is conservative. Or one likes to give money to others and the other doesn’t. Over time, these differences can become very upsetting. When there is not enough money to go around or a financial windfall, these differences can make the relationship seem untenable.
Alternatives to Divorce
There are several financial options a couple might take that could alleviate pressure and perhaps save the marriage. These include:
- Financial counseling;
- Informally negotiating changes in the way they handle money;
- Trial separation with agreed-upon financial arrangements;
- Postnuptial agreement (postnup);
- Legal separation;
A postnup is a formal, out-of-court agreement that usually clarifies matters such as spousal support and division of assets and debts in the event of a divorce. But it can cover other financial matters that the spouses might find to be helpful. It can be negotiated, perhaps with the help of a mediator, and then it is formalized in a binding contract between the spouses.
A legal separation formalizes a separation but leaves the couple still married. It includes agreements such as a date of (financial) separation, spousal support, child support and division of assets and debts. These agreements are filed with the court as part of a legal separation case. When approved by the court, the agreements all become orders of the court.
A transmutation is an out-of-court binding agreement like a postnup but it is more narrow in scope. It can be used when a couple would like to change the character of certain specific assets and/or debts. The change is usually from community property to separate property or vice versa. It could also be used to designate separate property of one spouse as now the separate property of the other spouse. This might be helpful in the event of a financial windfall or when one spouse’s financial resources are much greater than the other’s.
A divorce mediator or a Certified Divorce Financial Analyst can help you consider these options and hopefully work out a solution.