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Careful financial planning during divorce helps both parties define their needs and understand that the available finances may not allow both parties to maintain their pre-divorce lifestyle. For example, after divorce, money that was previously used to support only one home must now cover the expenses of two separate residences.

Tim and Cathy | Geoffrey and Theona

Tim and Cathy

Tim told Cathy he wanted a divorce after hearing her complain one time too many that he worked too many hours and was never home. He promptly leased an apartment three blocks away. They had been married for 8 years and had one child, Clark, age two. Cathy had a full-time Nanny costing $50,000 per year to help with child care even though she worked only two days a week. Tim was an attorney in Richard Nixon's old law firm earning $590,000 per year plus bonus. In a good year, he earned $1MM plus, but last year was not one of them. They lived in a three-bedroom apartment on Manhattan's fashionable Eastside that had purchased at the top of the market for $950,000 just over two years ago. Cathy's budget included a month's vacation in Nantucket and Europe each summer with Clark and the Nanny, weekly food expenses of $400, $19,000 in clothes, $5500 in shoes, and $100 per week for gymnastics for Clark. In short, even though Tim was in the 99th percentile of earnings, they were behind on paying taxes on Tim's partnership income as well as some other bills. Cathy was a big spender and felt a strong sense of entitlement to the lifestyle to which she had grown accustomed. In addition, she ran up some big charge bills at Bloomingdale's with a new makeover coordinator.

I worked with both Cathy and Tim in mediation to develop a budget and lifestyle that reflected Tim's income. I have worked on similar cases in matrimonial litigation where my job was to show that the there was not enough money available after divorce to support a high spending lifestyle and help the divorcing spouses develop more realistic expectations and budgets.