Divorce is generally one of the most challenging things someone can experience.
Whether a client is on the initiating end or the receiving end of the divorce process, there are many things they will have to complete as they go through the process. These things include generating a budget, figuring out how to divide assets equitably, determining whether spousal support or child support is warranted, and most important, planning their financial life after divorce. It may sound cold, but for many people, negotiating a divorce will likely be the biggest business deal they’ve ever done in their lives.
This is a very emotional time, and sometimes it’s difficult for people to muster the energy to address the tasks at hand. My advice is to encourage clients to do what they can, as quickly as they can. They may start off with baby steps. Encourage them to simply take a pen and a piece of paper, and journal everything they can from memory about the financial aspects of the divorce, as follows:
» Assets each partner brought into the marriage (houses, investment accounts, retirement accounts, inheritance, etc.).
» Date of the marriage.
» Property and assets acquired during the marriage (everything they can think of: cars, real estate, investment accounts, retirement accounts, pensions, jewelry, etc).
» How many years each partner served on the job, and any benefits earned such as pensions, employee stock programs, accrued vacation, medical benefits, etc.
» Debts incurred and outstanding during the marriage.
» Monthly household expenses during the marriage.
» Where legal documents, such as trusts and wills, are located.
» Date of separation.
» Projected budget and expenses after the date of separation.
After making these lists, your client should gather or make a copy of every statement with a number on it, even little things as small as a magazine subscription. If the statement is not available, ask them to jot down their best estimate of the amount and item.
Now this may sound like a lot, but there’s good news. You can reassure your clients that although there are many things they have to do, now they also get to write the script for their new life. There are certainly desires and goals they suppressed for the sake of the marriage, and now they get to undertake these desires and goals. Your client has a new script, and they are the author.
Also, they don’t have to go it alone. I can’t think of any great achiever who didn’t have a coach. I highly recommend that people going through a divorce work with a financial advisor to help them gather, analyze and make decisions on their financial settlement. Once they’ve signed the judgment, it is pretty much final, so they want to be in a position to make the most informed decisions.
Financial considerations for someone going through a divorce are different than for most people and an advisor with a Certified Divorce Financial Analyst designation is trained, certified and experienced to give advice for this circumstance. This person will serve as the quarterback of the team and will work along with the divorce attorney, CPA, real estate agent and mortgage lender, as they all will need substantial amounts of information during the divorce proceedings.
Finally, encourage clients to keep their eye on the end goal, and to be good and forgiving to themselves along the way. I often tell them, “If you need to rest, rest. Take a hot bath, have a cup of tea, listen to soothing music, get a workout. I speak from experience; you will get through this, and you won’t believe how great your life can be on the other side.”