Susan and Michael Johnson thought their divorce would be different.

When they decided to split after 15 years of marriage, the couple was determined to keep things amicable and to avoid the horror stories they’d heard so often from friends and relatives. Above all, they were committed to making sure their son David, 11, would be well cared for.

Working with their attorneys, the Johnsons reached a financial settlement each felt was fair. Michael had been the primary wage earner, bringing home $65,000 a year. He also had an $85,000 pension that he wanted to keep. Susan wanted to keep their house so that she and David would not have to be uprooted. Since the equity in the house was about $100,000 - $15,000 more than the value of Michael’s pension - they decided that the fair thing would be for Michael to get $21,000 of their savings, with Susan keeping the remaining $6,000. This would balance the differences in value between the pension and the house.

Because Susan’s take-home pay was only $10,000 a year, Michael also agreed to pay her $800 a month in spousal support for five years, in addition to the $925 a month he was paying in child support until David turned 21. Michael also agreed to pay the costs of sending David to a four-year public college.

Now, three years later, things have gone very wrong for Susan. Though Michael has never missed a payment, Susan has no money in the bank and is having trouble making ends meet. The $6,000 in savings is gone. She is behind on her mortgage payments, and she is in real danger of losing the house. Suddenly, the settlement that seemed so fair three years ago doesn’t look like such a good deal - at least not for Susan and David.

This outcome is not unusual because people rarely have a good understanding of what they are agreeing to. Numerous studies of the economic consequences of divorce have shown that the standards of living of the two parties often diverge dramatically over time, often with disastrous consequences - despite attempts to ensure that the outcome would be as fair as possible. These drastic reductions in standard of living, and the stress they create, frequently take their most serious toll on the children.

While financial settlements attempt to address the needs of all parties, they are often agreed upon with limited insight into the long-term economic consequences. As a result, settlements that appear fair and workable on the surface do not always stand the test of time.