Lessons for 2025 from the Brangelina Divorce

This will be short because few of us have much in common with the lives of Brad Pitt and Angelina Jolie. The news circulating today is that they have finally “inked” a divorce settlement after eight years of litigation.

People ask how these things can go on so long. Of course, custody and support (6 kids no less) can go on so long as the kids are minors. But when you see the divorce settlement consuming years at a time, there is reason for concern. And, often, a lot of that is emotional baggage over separation. The trend of the past decade has been to separate but it has become more and more challenging for lawyers to get their clients to conclude a financial settlement. One-minute clients are demanding closure; the next they aren’t responding to their lawyers’ calls. And recall that to get a divorce settlement requires two lawyers and two clients to intersect in meaningful ways.

This gets to be frightfully expensive to manage and it causes an emotional toll that most clients don’t seem to grasp. One reason for the expense is that the values of the assets ride the tides of the economy. These numbers don’t relate to the celebrated actors but if you are just an ordinary Dick and Jane who separated in 2016 living a normal life, the past eight years have changed a lot of the metrics of divorce. Your $400,000 house is now a $600,000 house. Your $325,000 mortgage is not under $300,000. Your $200,000 indexed retirement plan is now $600,000 even if you exclude the post separation contributions. But if you need to buy out a spouse from his/her interest in a house, the days of 3.65% thirty year mortgages have given way to near 8%. We have noted in an earlier post that a 3.65% mortgage is actually an asset in today’s market for those who can keep the property.

Then there are other things that occur over eight years. Some divorce litigants become ill. Others lose well-paying employment as their companies downsize or re-structure. These layoffs used to track general economic trends but if you have been studying markets lately, companies like Albertson’s, Big Lots and Advance Auto Parts are all reported to be restructuring despite a full employment economy. Hospitals are reporting significant deficits and colleges are starting to feel real pain from declining enrollments. And in today’s world it is the mid-level and senior executives who seem to be targeted for reductions in force once centered on the factory floor. The benefits of much appreciated retirement accounts and home values don’t feel so comforting when the wage engine that makes the former joint household run starts to sputter. We have seen clients go from receiving support to paying it because the primary bread-winner is now unemployed.

In one sense, these things would have occurred even without a domestic parting of the ways. But there is a real advantage to getting things done to resolve your divorce promptly rather than have the discussions interrupted or attenuated because jobs are lost, people fall ill or interest rates rise. Almost no one is happy during the divorce whether they initiated the proceedings or not.  Angelina is 50 and Brad is 62. The relationship lasted 11 years, the marriage about 2. Eight years of divorce is 1/6 of her life and 1/8 of his. By any measure, that’s a long time and one which even us mere mortals ought to avoid.