Making decisions in family law can be so taxing. The emotional, mental and financial consequences of making the wrong decision can be overwhelming. Choosing which route to go in divorce or custody, usually involves taking a close look at a number of things. One of the things is cost-benefit analysis.
What is Cost-Benefit Analysis (“CBA”)
Historically, the cost-benefit analysis was “used to determine the social benefits of a proposed project in monetary terms.” (According to Britannica.) So it was originally used by the US military to help make the best decisions on maximizing the use of our resources. However, businesses began to incorporate the use of this principle when they realized it helps to reach a level of success much quicker.
It simplistic terms, it is the act of giving a monetary value each available option in a given situation while weighing the benefits of each of those options against each other. For example, if someone is trying to decide if they should buy a car to commute to work into the city from the suburbs or buy commuter passes and ride public transportation instead. Which factors would they have to consider? What is the cost of each factor? What is the benefit of each factor? Then compare the two. The costs for the car include: car payment + insurance + gas + tolls + parking. The benefits include: quicker time + convenience. The costs for commuting: monthly pass. The benefits: Less money. So the costs for owning the car seem to be more than the commute. But the benefits of the car are greater.
Application of Cost-Benefit Analysis to Family Law Issues:
Family Court litigants would want to use the CBA when they are trying to negotiate settlement, when they are choosing the best route to go when all options seem unfavorable, or when they merely want to make sure they are making decisions that have the best long term consequences. It is not uncommon to find yourself in a position where it seems like “the lesser of two evils” or that you have to think of the long term when the short term seems more appealing.
Let me give you a more related example:
In a divorce action, the wife wants to know if she should buy out her soon to be ex (“STBX”) on the marital home of should she agree to sell. Her lawyer will tell her to sell if the STBX insists on her not keeping the home (it’s in his name) or may suggest she keeps it if she can afford it. But her friend may tell her to do the buyout so that she doesn’t have to uproot her and her kids from familiar surroundings. Her family may urge her to keep it to stay close to them. So everyone here has an opinion that serves a different interest.
But in all honesty, there are several factors to consider when it comes to property division in divorce. 1. The legal costs and fees to get the lawyer to continue to fight for either one of his/her recommendations. 2. The costs and logistical burdens of refinancing the home solely in her name. 3. Being tied down in a home that has tons of memories and maybe limiting in future desires to move. A financial costs-benefits analysis should always be done but so should an emotional costs-benefits analysis.
Sometimes it helps to separate the issue from those too familiar with the situation. Putting distance between yourself and those familiar, helps to get a clear and insightful decision. Write it out with all the possible outcomes, the consequences, etc. Gather as much information as you can, from all available sources including your ex or STBX, so that you can weigh everything and anticipate as much as possible.
This is an excellent example of a common issue where the CBA should be applied. This is something I emphasize when implementing strategy. Negotiations, in mediation or otherwise, is much more helpful if the parties utilize the cost benefit analysis.
Making informed decisions can be tedious, but they can be costly if you don’t. Weighing all the financial benefits as well as the emotional and mental ones can save you tons of stress.
If you need to discuss how my services can help you to negotiate settlement, please schedule here.