About 20 years ago, Boston University economics professor Laurence Kotlikoff started Economic Security Planning, a firm that sold financial-planning software. Recently, Kotlikoff has re-purposed the firm’s ESPlanner software to help divorcing couples weigh potential financial settlements and the impact they could possibly have on each individual. Now, he and his firm are offering this type of analysis via a new website, FairDivorceDecisions.com.
Kotlikoff explains that this by quantifying the long-term impact of potential settlements, the service “can stop a lot of the arguments.”
The idea struck Kotlikoff as he was going through his own divorce. Dayle Ballentine, his former partner, agreed that the software made things easier, and described their divorce as “pretty amicable.”
The software showed “where his future was going financially and where my future was going financially,” Ballentine told the Wall Street Journal. “You could really see … if you made choice A, what would happen, and if you made choice B, what would happen.”
Though the service is geared towards couples working through a divorce, lawyers, mediators, and financial planners would also find it useful. For just $500, users receive a detailed analysis of four possible settlements, which focus on the living standards each can expect moving forward. For $125, the service can provide an additional analysis of a proposal.
“A lot of soon-to-be divorced spouses are concerned and nervous about their financial futures. This software may help give them a picture of their future income, spending and investments to alleviate some of that uncertainty,” explains Dorene Kuffer, owner of Law Office of Dorene A. Kuffer, PC. “ It may also be a good tool to utilize, along with the asset and liabilities worksheet, to fashion a settlement for divorcing clients.”
The service does not determine what a “fair” settlement is — only what the proposed settlements will entail. It’s up to the the two individuals to determine what is most fair for themselves. The firm, however, does lay out some of the issues of fairness for users, but will not tell any of them what they think is most fair.
Kotlikoff also said that he’s not in it for the money, and that he’s actually losing money with Economic Security Planning. The software is there to help people. After all, there’s a new divorce in the U.S. every 36 seconds, amounting to almost 2,400 divorces per day, 16,800 divorces per week and 876,000 divorces a year.
“For 21 years, I’ve done nothing but lose money in this company,” said Ballentine. “To me, it’s been a charitable endeavor.”