It is not what any couple plans on, but it is a sad fact of life for more than a third of Kiwis who tie the knot. Emotionally and financially it can exact a high cost.  AMANDA MORRALL finds out how to avoid costly mistakes on the money side.

For richer, for poorer, marriage can be an enriching experience, except, of course, when it ends in divorce.  The financial repercussions of marital meltdown can be no less devastating than the heartbreak.

Feuding former spouses may never agree on who is to blame or who suffered more, but there's one thing both parties can be assured, warn professionals who deal with the financial aftermath of separation.

That's that the toxic brew of emotions that divorce stirs up - pride, anger, pettiness, vindictiveness and greed to name but a few - achieve little but pecuniary losses.  New Yorker Lee Slater, a certified divorce financial planner, says the real victors of an acrimonious divorce are the lawyers.

Having been stung by a malicious divorce settlement, Slater is familiar with over-the-top costs that couples rack up in vain attempts to settle scores. Don't litigate, mediate One of his tops tips for minimising the financial pain of divorce is to iron out issues in mediation instead of through lawyers on hourly rates or in court.

"Not considering mediation is a major mistake," he says in a trademark New York drawl during a phone interview with The Press. "You don't really get your day in court anyway," he says of the traditional adversarial approach to divorce.

"Most of it is done through lawyers and you're spending a lot more money to do it and they're riling you up."

In the 15 years he has worked as a certified financial divorce planner in New York, Slater has witnessed more financial carnage than he cares to remember.

Stay cool to keep costs down

He says emotional attachment to assets is a cost driver of epic proportions, particularly when couples decide to go to war just to spite someone.

"In New York, getting divorced can easily cost US$100,000," he says.

Done on the cheap in New Zealand - without the involvement of lawyers - amiable ex-partners might be able to untie the knot for as little as $175, the cost of the court filing fee.

But seldom are circumstances and relationships so simple that couples walk away from a failed marriage so lightly.

Statistics for New Zealand are hard to come by, but in the United States, divorce is estimated to be a US$28 billion-a-year industry with the average divorce costing US$20,000. In Australia, the average uncontested divorce is estimated between A$1000 and $2000. Where lawyers get involved, $8000 is more the norm.

Auckland's Susanna Stuart, financial adviser and author of Your Family Fortune, says a typical divorce in New Zealand will cost anywhere between $5000 and $10,000. But sparring Kiwis with money can rival the New Yorkers, she admits.

The same rules apply: the more fraught, the more expensive.

Couples who can work out the division of assets themselves or through a mediator in a civil way will be all the richer for it.

But at the same time, Slater and Stuart urge individuals to make sure they get a fair deal out of a divorce.

Think of tomorrow, not today

Inflation, cost of living projections, return on equity (ROE), and future earning potential may be the last thing on your mind when caught up in the thick of a divorce. But these seemingly banal considerations can impact hugely on one's future financial wellbeing.

These long-term financial forecasts are the specialty of people like Slater.

Whereas regular financial planners are typically approached for investment advice once a divorce settlement is concluded, financial divorce planners play a role in the early stages, he explains.

Using software models that take into account the effects of inflation, depreciation and rates of return from investments, they can project how long and how far money will stretch.

Slater says settlements that appear on the surface to be a fair deal, are often only superficially so. Lawyers, he says, can't be expected to be crystal ball gazers when it comes to money.

"Divorce lawyers tend to deal with some of this but they are not as capable as financial planners because lawyers tend to be people who are not math oriented, they tend to be the sum of their personalities, they don't understand the ins and outs of the tax laws and some complications involved."

Although popular in North America and Europe, certified divorce financial planners, a subset of advisory sector, have yet to make it to New Zealand.

Lyn McMorran, president of the Institute of Financial Advisers in New Zealand, says financial advisers here are more commonly involved at the back-end of divorce giving guidance on how to invest money from settlements.

However, New Zealanders and New Yorkers are alike in that they struggle with the same messy divorce issues, she adds.

Avoiding a repeat occurrence

Equally as important as financially plotting one's divorce is protecting leftover assets from being salvaged a second-time around, says McMorran.

"Even the most wonderful relationships can break down. You don't want to end up in a rebound relationship and have it happen all over again. You need to get advice on protecting your assets."

Generally speaking, the greater the wealth the more complicated the divorce but the financial consequences of separation resonate across the board.

Even couples of modest means and assets can be brutalised financially in the slicing, dicing and division of relationship property that follows divorce or separation.

Going from two to one necessarily entails economic hardship but individuals who disregard the process of financial planning for divorce can make it a lot worse for themselves, says Stuart. "Most people don't work it out until there's a major turning point or calamity in their life, that's the only time they drill down - when it becomes important," she says.

Getting a grip and good advice

Those overcome by the emotionalism of divorce would do well to solicit a savvy friend or a professional to help guide them through the process, says Stuart.

Expert advice is one of her top tips for a financially well-managed divorce, along with having a sound support system in place.

"Often when you go to a legal meeting, you don't absorb anything, it sounds so objective and harsh. You need someone who can absorb some of that and then you can discuss it with them later."

Getting advice from the right source is also critical, she says. Lawyers can't necessarily do it all and there are instances where a chartered accountant or a financial adviser might be required.

"I recently had a client who is going through a messy separation process. The husband had set up a whole lot of companies and trusts and she had signed a whole lot of things not realising what she'd signed.

"She's now going to be liable because she had personal guarantees on all these things. What she needed was a forensic accountant as well."

If commonsense is blinded by love, divorce, by necessity, is a like bucket of cold water to the head.

Still, Stuart says, it's often not until disaster strikes that people wake up to it.

"Never sign anything without reading the fine print or understanding what it is you're signing," she warns.

The co-mingling of finances after separation is another financial hazard, she cautions. Credit card companies care nothing for broken hearts and can go after whoever has the cash, regardless of who inherited the flatscreen TV.

Of equal importance, says Stuart, is updating insurances and wills.

50/50 is not always a fair split

In the haste to get a divorce over and done with and aggrieved ex out of one's hair, it is easy to submit to roughly drawn 50/50 divorce plan.

Stuart says women, in particular, are quick to cut their losses but it can come back to haunt them when they find out the 50/50 was short at one end.

"Often because of the emotional impact, they give up and settle for less. The ones I feel really sorry for are the one's who have no resources of their own."

One of the most common mistakes women make, according to Slater, is accepting the family home as a financial victory. He says the family home is quite often more of an emotional "security blanket" than an investment.

"But they want the house badly because it represents a chance for them to have some stability for the kids and stuff, but they don't look carefully at the budget over what it takes to keep the house going and if they have to buy the husband out of the house.

"A lot the time they have the house but don't have the cashflow and they don't realise how expensive the house is to run, paying taxes etc. And they end up in a really bad situation particularly because they haven't taken the trouble to figure it out."

The benefit of a financial planner, he says, is they can look objectively at assets, income streams, child support and projected living costs without the emotional cloudiness.

Separating the emotional from the financial is paramount, agrees Stuart.

"I know it's awful, but if you can it will really help the process."

Both stress the importance of adopting a long-term outlook. "I find this happens so often, they've got a settlement, and three or five years later their alimony or child support runs out and they have major problems, it becomes a disaster," says Slater.

Generally, it tends to be women with children who suffer the most because in most instances, women have sacrificed careers to raise children.

"They've often given up their careers to do that or taken jobs at a lower level to have the flexibility of staying home with the kids."

In New Zealand, which has the third highest rate of single-parented families in the world, women here would appear at high risk.

Most single parents are women, with half between the ages of 20 and 34. According to the 2001 Census, 48.58 per cent of single parent families earned $25,000 or less.

The ramifications of divorce or separation are obviously huge for this demographic and yet McMorran says it is uncommon for Kiwi women to seek professional advice about their finances.

Given the grim statistics, she reckons one of the worst things women can do is "give up their financial independence", when entering a relationship, even if children are in the picture.

Caught in the crossfire of divorce, children often end up being used as pawns, even for financial gain, says Stuart.

She's not alone in saying it is one of the most abject things divorcing parents can do.

"For me, that's a top priority. I've seen many cases in which the kids get used and it's unforgivable."