The tide has shifted in the workforce with women taking on more and more high-level career positions. Today, women are the top income earners in one-third of all marriages.
This shift has resulted in another tide change when these marriages end in divorce, as do an average of 50% of marriages. A new and growing trend has emerged where women are paying alimony and/or child support to their ex-husbands.
More than half, 56 percent, of divorce lawyers across the United States have seen an increase in mothers paying child support in the last three years and 47 percent have noted a hike in the number of women paying alimony, according to the American Academy of Matrimonial Lawyers.
When one spouse makes more than the other, alimony is a means to equalize the lifestyle of each spouse upon dissolution of the marriage. Originally intended to protect the spouse who was not the career-driven force in the household (traditionally the female), alimony is now equalizing spouses when the woman is simply more successful than her husband.
What does this mean for women on a career rise? While planning for a divorce is counter-intuitive to nurturing a happy marriage, understanding what your rise in salary can mean in all situations, from taxes to retirement, is important for prudent financial planning. Planning should begin when first considering comingling assets.
For a couple where one or both have already acquired substantial assets, a pre-nuptual agreement can be a good tool to help avoid unpleasantness later down the road. Consulting a financial advisor and an attorney before marriage can be helpful to understanding what is important to include in a pre-nuptual agreement, without making the agreement one that fuels your first serious disagreement. Creating a professional balance sheet and financial inventory upfront also paves the way to appropriate discussions, making sure that both husband and wife know what assets and liabilities are in place at the start.
Establishing good communication about finances and money in your marriage is likely one of the best tools to avoiding difficulties about money now- and later.
Setting joint goals, and checking in with your financial advisor regularly to track your progress, is also a very good idea to maintain a healthy financial relationship.
So go ahead – take that promotion – climb that corporate ladder – but be sure to check back with your financial plan, and financial planner, about how to avoid risks in your future as a result of increased earnings.
