In prior posts, we’ve mentioned new and innovative ways that entrepreneurs are creating to help fund a divorce. The idea for divorce insurance was modeled after the numerous other kinds of insurance offered to people. While divorce insurance would require prior planning, a former spouse has figured out a way to help those who may not have planned ahead.
The founder of the company Balance Point Divorce Funding had gone through an extremely lengthy and costly divorce after finding out that her ex-husband had hidden millions of dollars during their settlement negotiations. She was forced to borrow money from her family and friends, but wished there had been another option.
The process used by the company was modeled after contingency fee agreements used in personal injury cases and other civil litigation. While attorneys are bound by ethics rules that prevent them from taking a contingency fee agreement in domestic matters, a third party is not prevented from doing so.
The corporation agrees to fund all the costs associated with a divorce including lawyer fees, finding hidden assets or even maintenance of a familiar lifestyle. The client then agrees to pay the company a percentage of the value of assets awarded to them upon the finalization of their divorce.
While the company offers to finance divorces, they limit those in which the marital assets range from $2 million to $15 million, a range based upon profit margin research. Even though the range seems to suggest that couples with those asset totals may not require financial help, the ex-spouse found that many women were in need of funding to adequately represent their rights. Many of the women did not have funding of their own for reasons such as being the primary caretaker of the home and the children.
Source: The New York Times “Taking Sides in a Divorce, Chasing Profit” Binyamin Appelbaum 12/4/10