Can There Be P.E.A.C.E. in Divorce?

Have you ever heard the one about how to eat an elephant? One bite at a time. It’s about taking a seemingly insurmountable task and breaking it down into a series of bite-sized pieces to make it doable. Divorce can and should be handled in the same way. It may seem paradoxical but think of the word PEACE.

P.E.A.C.E.

This acronym stands for Parenting, Equitable Distribution (the division of your stuff), Alimony, Child Support, and Everything Else. You can see that divorce is clearly about money and, in some cases, kids. When these issues are negotiated in a systematic manner, the whole process can be accomplished relatively quickly. Pain can be minimized, and tens of thousands of dollars can be saved. Unfortunately, divorce often goes the other way for a number of reasons, nearly all of them avoidable. From my experience, there are two main causes for a costly and protracted divorce: first, letting raw emotion take control of the situation and, second, the lack of organization during negotiations.

A Vulcan Divorce

Before we go any further, I want to show you a quick illustration of what divorce would look like on the planet Vulcan. I won’t assume that you’re a science fiction geek like me, so I’ll give you a quick briefing on Vulcans. For the non-Trekkie, the Vulcan Mr. Spock was First Officer assigned to the Starship Enterprise. Famously known for their lack of human emotions, all Vulcan decisions are based on logic. They are not burdened by the silly human condition of emotion. Mr. Spock often respectfully questioned the logic of his Commanding Officer’s choices. Imagine how simple a divorce would be for Mr. and Mrs. Spock. They’d hash it out between themselves in about an hour, and it would look something like this.

Parenting

They would share time with their kids equally, alternating holidays and birthdays. All major child-rearing expenses would be discussed and agreed upon (rationally, of course) before incurring them. Once consensus was reached, expenses would be shared equally.

Equitable Distribution

Vulcans would simply break out their balance sheet and split it in half. They are Vulcans, so naturally, they keep their financial statements up to date at all times. Neither has any emotional tie to any of their possessions so this part goes very quickly. Their financial accounts total about $800,000. Simple, $400,000 each. They’ve paid off their home and it has no sentimental value (what’s sentimental value?) to either of them. They sell it and split the proceeds 50/50. You get the picture.

Alimony

Piece of cake. They break out their financial affidavit, which you’ll read about in Chapter 6, but for now, you just need to know it’s a listing of all incomes, expenses, assets, and liabilities. Then on an after-tax basis, they equalize their incomes with spousal support payments.

Child Support

This isn’t an issue in a Vulcan divorce. Both spouses make the same after-tax income (see Alimony), and all non-incidental expenses related to the children are approved together and shared equally (see Parenting).

Everything Else

There is nothing else; they’re Vulcans. Everything else would be a “loose-end” related to that silly human foible, emotion.

Fortunately, we’re not Vulcans. What would be the fun of that?  Since we share a planet, most of us are closer to the human starship commander, Captain James T. Kirk. For those unfamiliar with the storyline, Jim is a near polar opposite of Mr. Spock. He is hyper-emotional and prone to verbal outbursts that would have kept the writers of Saturday Night Live in material for months. Given our genetic reality, it’s very likely we’ll need some support in getting through the emotional journey of a divorce. This is exactly why the collaborative approach can be so powerful.

Jon Kagan collaborative
Jon Kagan is a financial advisor in Navarre, Florida.