Tuesday, October 13, 2009

Financial Planners Divorce Survey

In 2008 the IDFA (Institute for Divorce Financial Analysts) performed a survey among its members, which was responded to by 289 CDFAs (Certified Divorce Financial Analysts).

Some interesting results related to Divorcing clients included the following:

Effects of the Recession:

"When asked to assess the difference that current economic conditions have made to the number of new divorcing clients coming through their doors, 68% say that the recession has not affected the number of cases, and 17% say that the recession has increased the number of new cases they’re seeing."

"Thirty-seven percent of respondents told us that the current housing market has forced them to come up with creative solutions to property-division problems when the matrimonial home fails to sell – or would sell for less than what clients still owe on the mortgage. The most common solutions include:
  • Ex-spouses retain joint ownership until the market improves, agreeing to postpone final division of assets until after the house is sold
  • Renting the house to a third party until the house can sell for more than the debt
  • One ex-spouse stays in the house until the market improves
  • One ex-spouse stays in the house and pays rent to the other until the market improves
  • Structure two levels of spousal support: before and after the house sells
  • Former spouses live in separate areas of home until house sells/market improves
  • Create an analysis for a HELOC so the spouse who retains the marital home can buy out the other spouse now – and wait until the market improves to sell."

Mediation, Collaboration or Litigation:

"When asked about their work in the three most common dispute-resolution methods, 66% of respondents say they work in Mediation, 66% work in Collaborative Divorce, and 62% work in Litigation."

Costs and Fees:

"Of those who work in Mediation, 88% of respondents says that their average fees for processing a divorce using this method are less than $5,000; in Collaborative Divorce, 83% of cases cost less than $5,000; and in Litigation, 69% cost less than $5,000."

"When asked about legal fees, respondents said that 50% of their clients spend between $10,000 and $25,000 on divorce-related legal fees."

These survey results are copyrighted and are used with permission from the Institute for Divorce Financial Analysts™. www.InstituteDFA.com Thank you to the IDFA for allowing us to reproduce these survey results.

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