'I'm a Marriage Lawyer, Divorce Is Much More Expensive for Two Big Reasons'

I have been working in matrimonial law for over two decades. I graduated from New York's Fordham University School of Law in 1995 and started working in commercial litigation at a large international law firm in New York City. I was a young attorney dealing with cases where I represented companies that had disputes with other corporations.

It was a wonderful place to work, but I was interested in having more personal contact with clients on a regular basis. I wanted to have an impact on an individual's life, rather than an impact on a corporation and its operations.

I thought matrimonial law was probably one of the most personal ways I could be involved in somebody's life; helping them navigate the end of one of their most important relationships.

Coming from a big firm, my options were looking at trusts and estates or matrimonial law, the latter of which was probably more suited to my strengths. It was something where I could not only continue to practice litigation, which I really enjoy, but also where my more empathetic side could be a benefit in terms of my practice. So, after doing three years of commercial litigation, I moved to another firm to practice matrimonial law in 1998.

Marriage in the pandemic and cost-of-living crisis

I think during the first few weeks of the pandemic, everything came to a general standstill. Everyone seemed to be kind of frozen and individuals were dealing with the crisis in their own way. I believe not everybody, at that point, was thinking about their relationship.

After those first initial weeks, I saw an uptick in divorce, people who were encountering difficulties in their relationship that were compounded or made more immediate by the pandemic, and in conflicts within divorces which had already been initiated before the COVID-19 crisis.

What I saw during those initial months was a great deal of conflict over custody; disputes over where children should live and over holding to parenting schedules that were already in place.

For example, one parent might move out of New York City to a vacation home in order to avoid what they thought was a greater risk of COVID-19 in the city, while the other parent would have to remain in the city.

There would be a dispute over whether the parenting schedule changed as a result of that, or even if there was an agreement on it temporarily changing, there would be discussions over when the appropriate time to resume the parenting schedule they had already agreed to was. There was a lot of litigation over that type of conflict, that was the most common dispute I saw during the pandemic.

I think things normalized for a period of time and what we're seeing now is not a huge increase in divorces as a result of the cost-of-living crisis, but depending on the case, you definitely see inflation is having an impact in terms of how we're trying to resolve certain divorces.

Divorce issue 1: Dividing marital assets

Because inflation is at a greater rate than we have seen in a significant period of time, a client may have to re-evaluate whether they could retain their former marital residence. It's not unusual for people to have an adjustable rate mortgage, meaning that their repayment rate would be flat for a fixed period of time, but then in the future it could jump up due to increased interest rates.

So, in this scenario, when we see the interest rate jumping considerably, it's going to cause a significant increase in the monthly mortgage repayment the client is going to have to pay in the future. Where you see it potentially doubling, it vastly impacts this client's ability to maintain payments on the property going forward.

So, we went from a situation where the client was anticipating retaining the property, as part of their share of the marital assets, to saying: "It's not in my best interest to keep that going forward, because the cost is going to be more than an alternative residence." So that client may be better off having the proceeds of sale from the marital property than keeping the residence.

Often, one problem in marriages is that there is one spouse with greater earnings than the other. So, if the one who is going to keep the residence after the divorce has lower earnings and the mortgage is either in both of their names or the other spouse's name.

When that happens, it can be harder to refinance the mortgage in the lower earning spouse's name. It could be the interest rate will be higher or they just don't have the ability to get a mortgage in their own name.

So, when negotiating divorces now, we consider whether the spouse giving up the property could keep their name on the mortgage. This means the property does not have to be refinanced and the spouse who wants to keep it can actually stay in the residence. This process is not unusual, however there's a more pressing need for it now.

Divorce issue 2: Complications with alimony

Inflation is adding considerations to divorce we haven't seen in several years. As part of many divorces there is support paid from one person to another, it could be alimony or child support which goes on for a period of time. But the purchasing power of a dollar today is not going to be the same as the purchasing power of a dollar ten years from now. So, it's not unusual in settlement agreements to clarify that if support is being paid for a significant period of time, the amount of that support increases over time.

Often, the rate of increase is tied to a specific consumer price index. So, when interest rates were running between two and three percent annually, it was a lot easier to tie that increase to a consumer price index.

However, when we don't know what that interest rate is going to be, or if we know that it's running at a significant number, that's a negotiation that becomes much more complex.

Sometimes, the agreement provides that the support is adjusted depending on the cost of living measured against an objective index. However, when that number can be really large, the party paying may object to being tied to that specific index.

In some cases, we insist that payment is tied to the consumer price index, but it will remain in line with the payor's income. This means that if inflation rises at nine percent, but the income of the paying spouse only increases by six percent, then we're only going to increase the support by six percent. Other times, we might pick a flat rate for it to increase. These are all negotiated terms and are all very specific to the client's situation.

When considering how to better prepare for divorce amidst the cost-of-living crisis, look at whether you have a variable rate mortgage or any costs that can float going forward based on the rate of inflation. If that is the case, it might be in your best interest to change those to a known cost or a fixed rate going forward.

If you have any other debt that is going to be highly impacted by inflationary pressures, it may also be in your best interest to use other assets to eliminate that debt.

Has the cost-of-living caused an increase in divorces?

I have seen an increase in people coming to me for divorce in the last few months, but I don't know whether that is directly tied to the increase in inflation causing greater financial stress which then creates greater stress on a marriage.

It may also be because it's the end of summer people are going back to their day to day lives and people are ready to deal with their personal lives more than they were beforehand. That's not unusual.

During the fall and the beginning of the New Year, people make resolutions about what they are going to do with their lives. For a lot of people, making the decision to divorce is very difficult and they're finally saying to themselves: "I need to do this for myself and my family." There are times in the year we all get very self-reflective and it's not unusual to see an increase in divorces as people contemplate their lives more deeply.

Paul Talbert is a leading divorce attorney who co-founded New York-based family law firm Donohoe Talbert LLP in 2012. You can visit their website here.

All views expressed in this article are the author's own.

As told to Monica Greep.