Sarah Catherall’s just-published book, How to Break Up Well, is a guide to divorce based on the author’s own experience, accounts from others, and advice from experts. The following excerpt is from chapter eight: ‘Why so many women get screwed’.
Breaking up is expensive. Suddenly the house (if there is one) has to be divided, other assets split, and it costs more to run two households rather than one. I’m one of the privileged few who could stay in the family home, take my kids on holiday, and even keep my nanny on the days I worked.
But my situation is atypical – divorced and separated women are more likely to be worse-off financially once the relationship ends. It’s costly enough to run two households, but once the assets are divided up (if there are any), the woman is more likely to be running a household on a reduced income – often because she has taken time out from her job to raise the kids. It’s called “the motherhood penalty”, where a woman has worked in paid employment only part-time or not at all while the children have been young, while her partner has soared up the career ladder.
It’s pretty common that the person who has the higher earning capacity recovers more quickly from a separation than the one who doesn’t.
The findings of a study by Professor Michael Fletcher are revealing, and likely to remain true. As summarised in an AUT News article: “Dr Fletcher was able to follow the economic fortunes of pairs of ex-partners up to three years after separation. His analysis found in almost half of the separations the man gained financially, after taking into account the change in their family size, while their ex-partner was worse-off. In a quarter of cases, both were worse-off.”
“What typified that first group,” Dr Fletcher says, “is that they had a reasonably good income on average before the separation but most of it came from the man’s earnings. After separating, although the women increased their average earnings, this was not enough to offset the loss of the ex-partner’s income. They were also more likely to have care of the children than were the men.”
Those kind of statistics don’t surprise female barristers like Lady Deborah Chambers KC, who has spent decades fighting for clients, often in high-net-worth divorce cases. She’s a sharp, intelligent litigator, who has been known to make those on the other side quiver when she is cross-examining someone on the stand. Talk about girl-power: it’s thanks to Lady Deborah that some of the judgments delivered in her clients’ favour have made the law better for women who have dedicated their lives to supporting their husbands and families.
Lady Deborah is hot on a few things: one is that women often have virtually zero financial power in their marriages and relationships. Her big tip is that we women should never lose our economic independence — if you’re taking time out from the workforce for the family, only do so for a maximum of five years.
Says Lady Deborah: “Women should be very careful about losing their earning capacity. They should do a WOF test on their relationship. Check your relationship for equality. If you have a trust, are you both trustees? Do you get consulted on financial decisions?”
Part of her purpose is to get the message across that too many women are “sign-here wives”. In higher socio-economic households, they’re often happy to step out of the paid workforce and let him take care of the accounts – relegating that to the same job status as putting out the rubbish or mowing the lawn. But she tells me “the problem with that is divorce or death”.
“It seems like a great choice at the time, but in the modern world – and I think most women have come to this view – it’s better to remain economically independent and to remain in the commercial world. You don’t need to be a CEO of a telecommunications company, but have your own money coming in. If something goes seriously wrong, you can get up and running again.”
She concludes: “Don’t abdicate financial responsibility to him. In some ways it’s easy for him to take care of that. But ideally, I’m in the old-fashioned feminist category of saying: keep your economic independence.”
Typically, even in the 2020s, says Lady Deborah, the man is the main income-earner and he often runs the financial accounts. (Tick – that was the case for me.) “He understands them, he knows what’s going on, he knows their value, he knows which levers to pull to make them work more or work less. And he’s more commercial. It’s not always the case, obviously, but it is often the case, particularly in high-income families, that the woman will be the support person.” Are you nodding?
Your role has been to run the household, wipe noses and make sure the kids are happy, ensure hubby is emotionally and physically supported, and the fridge is full, the kids are whizzed around to after-school activities. And that’s on top of entertaining hubby’s clients or business colleagues, which sometimes still comes with the territory! It’s a huge, multi-faceted role being a primary caregiver and household PA, but this supportive role can backfire in a divorce, Lady Deborah has found time and again. She says women often don’t know where their money or assets are. When it comes to actually fighting for their share, women are also less likely to dig their heels in.
“If you’ve been in that traditional role, you’re often not used to commercial processes, you might be wanting to avoid conflict because your role has been to smooth things over, make the marriage work, make the family work, and be the person who gets consensus. I think women tend to try to get consensus when we can. And you don’t know about finances and you are often very conscious of the children’s interests and there not being significant conflict with their father.”
Men usually do better when they’re fighting for their share “because they’re better at thinking: ‘I’m going to be a good dad, but I’m going to fight with you about what is a fair division.’ They often understand business far better. And they’re probably much more comfortable with the idea: ‘There’s going to be a bit of a shit-fight here, but that’s okay. We’ll argue about it, and then it’ll be resolved and we’ll carry on, and I’ll be okay and she’ll be okay.’ And not getting all emotional about it. I mean that sounds terribly genderist, but that still tends to be what happens. Women are more concerned with the emotional impact, whereas men are more practical and objective and let’s get on with it.”
Mmmm…
In New Zealand, 1976 was a big year for divorcées. Around the time of my seventh birthday, the law changed so that assets had to be divided equally after a marriage break-up. Not long afterwards, in 1980, “no-fault divorce” was introduced. Before that, it was bad luck if you were a woman and your marriage collapsed; in most cases, you pretty much had to take whatever your husband offered you. But from 1976, the family home could be sold and the proceeds shared equally.
Then section 15 of the Property (Relationships) Act came along: it was intended to financially compensate a woman who had given up paid employment to run the kids around day and night while her husband coasted up the career ladder. As she was wiping another bottom and he was enjoying corporate lunches, the law changed to compensate the caregiver for a share of his future earnings if their relationship ended. Unfortunately, though, in reviewing how section 15 has been working, the Law Commission found that it has been a costly and confusing process when it has gone through the courts, and that it is difficult to fight. So the commission wants section 15 repealed and something like a Family Income Sharing Arrangement introduced, where future income would be shared for a certain period of time.
Under current relationship property law, a couple who have been living together for three years or more can claim half the assets they get during the relationship. (On another note, the relationship property law now covers de-facto relationships, civil unions and same-sex couples.)
For now, though, (and at the time of writing), we have a law which still typically penalises the partner who has spent time out of the paid workforce, and that’s more often than not the woman.
Lady Deborah also points out that “there is still a very old-fashioned view that ‘he earned it, so it’s his money and he’s very kind to share it’. That’s a kind of a default position, because there had always been the law up until 1976: that basically what you kill, if you earned it, if that was your financial contribution, that’s what you got back. It’s a relatively new concept that things have to be shared.”
You don’t have to look far to find households being run like the Stepford Wives. A case in point is that of Elizabeth, who has done some serious soul-searching about her marriage and the way her ex’s financial control was a form of abuse. She lives in Auckland, and has been a stay-at-home mother since her first daughter was born about 20 years ago, while also supporting her ex growing his business.
Elizabeth spits: “He’d tell me he was being generous. I had a bank account that he used to pay money into, and that was our little family trust, and I used to pay all of the bills out of that for the houses, and I used to pay myself a weekly wage out of that. It was another form of control. I knew he was controlling, but I’ve never actually given him a title and understood it. It’s not until you’re not with them, and then you start researching and going: ‘Oh my god: it was covert control. It was not overt, like domestic violence [but had much the same effect].'”
That’s part of the reason, says Lady Deborah, why people whose relationships make them miserable – usually women – often stick with the status quo. Money and children are the two main reasons why toxic relationships linger for too long, she tells me.
Lady Deborah has done enough work with unhappy wives and partners to know the typical scenario: three or four years after they have left Tom or Jonas, they’ve rebuilt their life, they’ve found someone they love – or they haven’t, and they’re happy on their own. “And they just say, ‘Oh, my god, life is so much better. I feel so much happier. I just wish I’d left earlier.'”
But some were ill-prepared. You’ve got to plan your exit, says Lady Deborah. If you’re thinking of leaving, start putting money away — stuffing it in a sock if you need to. “You might know who you’ve married, but you don’t know who you’ll divorce.” If a woman is nervous that he will “take me to the cleaners”, Lady Deborah counsels her to, “be proactive: go and see a good lawyer before you separate and get advice. Talk about what documents you need, what you need to do, what is going to be the outcome if you separate”. She adds: “Men are much more inclined to see a lawyer and make a plan. Separating relationship property equitably is likely going to be the biggest financial transaction you’ll ever be involved in. Go and see a lawyer beforehand, get your ducks in a row and focus on how you will make your finances work in the years to come.”
How to break up well by Sarah Catherall ($40, Bateman Books) is available to purchase from Unity Books.