Tag: Maryland

3 Keys to Start Your Divorce Right

Posted on by Steve

It takes courage to ask for a divorce.  You want to start your divorce right, but are not sure how. Commonly,  many divorcees dive right in before they change their minds. As a result, they make key mistakes.  

You are sitting in a marriage that is simply not working.  It’s not “broken,” a “failure,” or any other label that conjures shame. The relationship has transformed in such a way that it’s no longer serving the couple.  It’s as simple as that.  Yet, many divorcees use similar defining words as they end their marriage.  These words invigorate the divorce stereotype, which misguides their initial steps as they start the process.

Broaching a divorce with your spouse takes tremendous courage, especially if there is pent-up frustration and toxicity.  Common responses are disbelief, anger, loss of trust, and fear as the family’s status shifts from what’s familiar to a landscape completely unfamiliar.  Misperception, and a tendency to argue against the truth, quickly bring one’s protection instincts to the forefront.  This is why many couples, in marriage counseling quickly drop into hiring family lawyers as the next step.  They move from putting energy towards finding a successful outcome to a structure that is not designed to produce a cohesive resolve.

It doesn’t need to be this way.  This can’t be the norm because not only do families carry the ramifications of a botched divorce, but so too do their communities.  Yes, there is a legal process necessary to end your marriage contract. But this does not mean the swirling nature of this process should, by default, impede upon the best possible outcome each person truly wants for themselves and their children.

As I’ve coached divorcees, I have come to realize successful divorces are those that take the right steps upfront.  Here are three keys to starting a divorce off on the right path.

First: Vow to Do No Further Harm

Marriages begin with sacred vows.  They are sacred not only because they are spoken, often in front of family, friends, and clergy, but because these intentions formulate dreams of what can be.  The dreams are sacred intentions for each other, children, and a future on which the couple dedicates themselves.

When a marriage begins not to work in a way that serves the couple, it becomes scary to enter into the abyss called divorce. However, isn’t it possible to establish a new vow – a new intention?  Speaking a vow at the end of their marriage sets the couple on a path to the divorce outcome they truly want.

It takes a lot of courage to face divorce with integrity and without blame and judgment.  Yet, isn’t the alternative route worse?  If couples recognize the marriage is simply not working, and begin telling the truth about the marriage and what’s transpired, they can speak a new vow – “The Vow to Do No Further Harm.”  It recognizes harm was done, but then lays the groundwork for possibility and hope, just as did the vows spoken at the marriage ceremony.  It brings different energy so they can uncouple in the best way possible.

Second: Create a Platform to Hear Shared Intentions

Just as marriage vows are spoken by each party, so too must their intentions.  “The Vow to Do No Further Harm” is positioned for success when each person has a platform to speak their shared intentions to the other.

I’ve worked with couples whose financial life is so intertwined, like couples who own a business together, or those who have major shared real estate interests, that they are keenly aware the family court is not the best place to work out their future.  These couples are almost forced to work together.  I start the divorce coaching by asking them to outline the intentions they have for themselves, their spouse, their children, their employees, and their friends.  This initial dialogue allows them to see the similarity of their intentions.

The nature of divorce brings a lot of distractions.  A true understanding of shared intentions is the foundation upon which the couple co-creates their future. It allows them to reset their focus, rather than aimlessly arguing.

Third: Know When to Pause

I have yet to find a Family Court that seeks to learn about all the unique inner workings happening within a relationship and then alters its process so it better aligns with the couple’s situation.  No! The Family Court operates off established civil procedure, and every couple is forced to go through it.  Some cases move through easily, while others are square pegs slamming into round holes. Two factors that can quickly knock a divorce off the right path are high contentiousness and financial complexity.

Every divorce maintains a layer of unavoidable costs.  Some unavoidable time, energy, and money are necessary to complete the divorce process.  However, when couples have high degrees of unresolved contentiousness, the legal process can quickly shift the effects beyond the unavoidable costs to compound avoidable costs of time, energy, money, and health.  These four forms of prosperity are the keys to rebuilding one’s life.  Yet, they are eroded by the toxicity around divorce.

Divorce problems do not go away once the judge stamps the decree final.  Marriages that entered divorce with unresolved contentiousness find the contentiousness compounds and lasts well after the court has made its final ruling.  By admitting that your relationship is at its weakest, and pausing so you can both calm the contentiousness, you can save unnecessary costs to you and your family.

The other reason to pause is if your marriage has a high degree of financial complexity.  Lawyers, mediators, and judges are not trained financial experts.  They do not hold financial certifications, take continuing education, or stay fully up to date on all new financial rules and protocols.  Additionally, family court decisions do not always supersede tax rules, retirement plan administrator requirements, insurance contracts, debt agreements, and other key financial constraints.

The family court is simply looking to solve a division problem presented to it in the form of a case.  Since the court can make these decisions without first consulting other licensed professionals, financial mistakes can cost much more than the hourly fees you paid to professionals who crafted case arguments and proposals.  It’s in both party’s best interests to become fully informed about the financial side of their marriage so they can be in a position of strength to make smart financial decisions.

In summary, the keys to successful divorce depend greatly on stepping back, assessing your situation, and choosing unconventional steps, rather than diving into the “traditional” approach to divorce.  As I look at the issues facing my parents as they divorced over 40 years ago to the challenges divorcees face today, I can honestly say success lies in doing what might seem difficult upfront but winds up creating so much ease as the process unfolds.  Let’s face it!  The divorce industry has not received “blue ribbons” for the outstanding progress it’s made over the last few decades.

What Do Businesses Gain from Proactively Managing Divorce Risk

Posted on by Steve

Divorce poses a significant systemic risk to businesses, akin to a pandemic in its scope. Wise investments in prevention and mitigation can drastically lower the costs associated with divorce for businesses. Divorce impacts not just the family unit but also ripples through to employers, affecting time, energy, money, and health as employees navigate difficult divorce transitions.  Managing divorce risk is paramount to long-term success.

If businesses invest in divorce risk management as they do with other systemic risks like cybersecurity, they can reduce an inherent cost impacting their bottom line year after year. This proactive approach requires the right strategies and players. Here are some key gains for businesses:

Recapturing Lost Productivity

As you consider the importance of managing divorce risk, consider that employees are already distracted by social media, news, online shopping, and messaging, which impact productivity. Divorce adds a more intense layer of distraction through legal demands, frequent communication, family scheduling issues, household transitions, toxic ex-spouses, and ongoing conversations with co-workers.

These distractions affect bottom-line productivity. For instance, consider a $50,000 salaried employee who becomes 25% less productive. This employee ideally contributes two to three times their salary to the bottom line, so their economic contribution is $100,000 to $150,000. A 25% distraction each month equates to a substantial loss, and these distractions can persist long after the divorce is finalized.

Reducing Strain on Senior Leaders and Key Producers

Senior leaders and key producers present a greater risk than rank-and-file employees, as their divorce cases often involve contentious legal battles. Their job and perks can become pawns in divorce negotiations, such as when a spouse fights for custody, knowing the other’s job demands strain their ability to balance work and family.

Supporting these senior producers is vital because they carry experience, internal and external relationship responsibilities, and subject-matter expertise crucial to the organization’s success. They also influence daily performance across teams.

Lowering Resignations

A study by Philip N. Cohen, a Sociologist at the University of Maryland, analyzed job turnover and divorce over 26 years. His findings show a potential job turnover probability for divorcees ranging from 12% to as high as 20%, with a median turnover rate of about 16% per year. This means businesses could lose one out of every five to six divorcing employees, which is costly given the expense of hiring, onboarding, and training new employees.

Divorcees often struggle to manage work demands alongside solo parenting, face mounting financial obligations, and undergo deep reflection about their priorities, leading to higher resignation rates. All these factors highlight the importance of managing divorce risk.

Reducing Absenteeism and Presenteeism

The demands of divorce place a direct strain on time and energy. The legal timeline of divorce does not wait for key work projects to finish, forcing employees to step away from work to tackle their divorce tasks.

Contentious divorces increase uncertainty and fear as employees await key decisions that can take weeks or months. Without addressing patterns of negative rumination, employees may be present at work but not engaged in their tasks. Effective coaching helps employees prioritize important tasks and manage rumination, keeping their attention focused on the present.

Increasing Loyalty

A recent Gallup poll shows that approximately 25% of employees believe their employer cares about their overall well-being. Of those employees, 69% are less likely to look for a new position. Leaders who support employees through difficult times, such as divorce, make a direct investment in loyalty.

Philip N. Cohen’s research indicates that 2.5% of a workforce may be going through a divorce at any given time. This number increases when considering employees in “invisible divorces” (those who have yet to separate) and those still struggling post-divorce.  This further emphasizes the importance of managing divorce risk.

Conclusion

Employers need to recognize the stealth costs of divorce on their business. An Employee Assistance Program (EAP) is a great starting point, but it should not be limited to legal and therapy connections. Instead, invest in divorce experts who can train staff and leadership. This education and support reduce avoidable costs of time, energy, money, and health, ultimately lowering the risk of divorce-related costs impacting the employer and the employee’s family unit.

Cost of Divorce on Businesses

Posted on by Steve

Since California instituted the no-fault divorce law in 1969, divorce rates have steadily increased. While it’s debatable whether the number of divorces would have remained steady without this law, the nationwide adoption of no-fault divorce laws has coincided with divorce rates reaching pandemic levels. There is a substantial cost of divorce on businesses.

Today, the average divorce rate for first marriages is around 50%, and it jumps to 67% for second marriages. These rates, combined with the unmeasured “invisible divorce rate”—the number of couples who are married but disengaged and living in unhealthy relationships—highlight the significant impact of marital issues on businesses.

The Harvard Business Review estimates that divorce costs US businesses around $150 billion annually. Despite this, businesses are failing to take proactive steps to quantify and manage this stealth risk. Unlike other risks that can be transferred to insurance carriers, businesses have no option but to self-insure against divorce risk. Unfortunately, the landscape of self-insurance tools and resources for this issue is sparse.

The Growing Divorce Industry

As the cost of divorce on businesses continue to rise, so too does the divorce divorce industry, with some estimates valuing it at $28 billion per year and a national average cost of $20,000 per divorcing couple. The Institute of Divorce Financial Analysts reports that approximately 50% of divorces are “pro se” divorces, which do not involve litigation. However, divorces with high contentiousness and financial complexity are more likely to incur greater litigation expenses. This suggests that about 25% of all marriages are likely to end in litigation.

 

The Core Problem

The core problem lies in the mismatch between a divorce case’s characteristics and the family court’s process for legally ending a marriage. Family courts follow standard procedures that work well for amicable exits but are not effective for highly contentious couples or those with complex financial situations. These cases often result in “avoidable costs” on top of the baseline “unavoidable costs” inherent in every divorce.

Avoidable costs include not just money but also time, energy, and health. These factors directly impact a business’s bottom line through productivity declines, increased absenteeism and presenteeism, resignations, quality and safety issues, and the spread of stress to other employees.

The Financial Stress of Divorce

In addition to the direct costs, there is a rise in the employee’s financial stress. PricewaterhouseCoopers conducts an annual financial wellness survey (2023 linked) that routinely reveals financial stress as the number one stressor in families’ lives. This stress often precedes divorce and skyrockets during the process, as divorcees face increased worry about their future and a sense of loss regarding their accumulated assets.

Expanding Employee Assistance Programs

Many business leaders and human resource managers are expanding services through Employee Assistance Programs (EAPs), offering access to legal counsel and psychotherapy. However, businesses cannot guarantee that these services will reduce costs for the employee and the business. Moreover, the therapy timeline doesn’t always align with the divorce timeline, deferring the immediate need. Coupled with the delicate nature of these conversations, the potential risk management outcomes are not as effective as they could be.

Proactive Solutions

The cost of divorce on businesses should be treated in a proactive fashion as other  systemic threats, like cyber risk. They can invest in awareness training and implement support tools to prevent and mitigate the impacts of divorce. This proactive management could involve aligning with Certified Divorce Coaches who can help employees navigate the divorce process, mitigate mistakes, develop strategies, and understand both the internal and external aspects of divorce. Additionally, Certified Divorce Financial Analysts (CDFA®) professionals can help employees manage the financial complexities inherent in their divorce.

Businesses can add these offerings to their EAP or align with respected professionals. Relying solely on attorneys to provide these resources can be a mistake, as they may not offer comprehensive support.

Benefits of Proactive Management

Proactively managing divorce risk and the specific cost of divorce on businesses can help businesses reduce the impact on their bottom line. It ensures employees receive the support they need, leading to improved focus, reduced stress, and better overall outcomes during the transition.