Financial advice for women going through divorce after a long marriage

Divorce at any age is life changing. The key to success, to ensure you are financially in the best shape possible, is to get professional financial planning advice that is specific to divorce. With comprehensive, divorce-specific advice you won’t limit your opportunities, now or later in life. The older you are the less time you have to recover from decisions made in haste, especially decisions related to financial matters.


Do

Do build your team of professional support one at a time

The experience and expertise of your team will help you maximize your settlement or the outcome in court. Your professional team is strongest if they’ve successfully worked together in the past.

If you have enough assets to protect, your team may include:

  • Family law attorney
  • Financial or wealth advisor with divorce as a specialty
  • CPA (possibly a forensic CPA)
  • Estate attorney
  • Career counselor to assist with re-entering the job market
  • Marriage and/or family therapist

Do interview and choose a family law attorney

A good family law attorney will provide the overall framework of your options for divorce and associated costs and help you set realistic expectations for making intelligent, informed decisions. Get referrals. Talk to people you respect. These are the people who can provide you with the names of competent and respected family law attorneys.

Do choose a financial advisor that specializes in divorce

Financial advisors with extensive experience in divorce planning are more capable of addressing the specifics and nuances of your total assets and liabilities, not just liquid assets. Liquid assets comprise only part of your financial life.

To provide an accurate assessment of your financial situation you will need to provide documentation for all assets and liabilities. This includes your current tax returns and statements for any savings, checking, brokerage and retirement accounts (including current and past employers), as well as information on pensions, annuities, life insurance policies, Social Security benefits, mortgages, partnerships and stock options/RSUs.

Let your attorney utilize the legal process to acquire any required documents you cannot successfully uncover or provide on your own.  An attorney can evaluate whether hiring a forensic CPA is warranted or not.

Do understand and prepare a detailed list of your expenses

Three factors determine your financial status: how much you earn, how well your investments (savings) perform, and your actual expenses (how much you spend). Actual expenses typically have the biggest impact and are the one component you can control.

Understanding your future expenses may require research and is essential to knowing how much you will need to live on your own.  What you disclose on the Divorce Expense Declaration may not fully indicate your actual expenses going forward. It generally doesn’t include the cost of health insurance (COBRA or a new policy), housing rentals or the cost to downsize. This type of planning takes into consideration alternatives based in reality. Working with a financial advisor who can model housing choices combined with settlement options will allow you to see the short- and long-term impact of your decisions.

Do be patient and understand your choices

It is stressful and often overwhelming the amount of information required and decisions that need to be made during a divorce. Work with professionals who take the time to help you organize and understand the information required to make informed choices.  Listen to their advice and trust that what they are advising is in your best interest. Be patient with yourself and take breaks when you are overloaded.


Don't

Do not rely on family for legal advice

Friends and family should not be your source for legal advice. Legal advice should come from your attorney. Divorce is not a “one size fits all." For example, if your family lives in Texas and you are in a community property state like California (there are 9 community property states) their advice and experience is not applicable to California divorce laws. You are paying your attorney to advise and prepare your strategy for the best possible outcome - listen.

Do not be passive

This is not the time to be passive. You need to advocate for yourself for what you need. If you don’t understand aspects of the divorce process, speak up. Ask questions. The most effective professionals take complex information and make it understandable, explaining with as much detail as you need to understand and make effective decisions. If your assets need to provide income for you to live, either entirely or to fill a gap between earned income or support and expenses, make sure you understand what your monthly needs are and how to achieve them. Learn how to read financial statements. If necessary, have your advisor meet with you quarterly until you are comfortable reading and interpreting statements, including the fees.

Do not assume everything is split 50/50

A long-term marriage doesn’t mean everything is split 50/50. Life isn’t fair. Neither is divorce. That doesn’t mean you have to be a victim or end up eating cat food. It does mean your expectations need to be properly set, and you need to understand the short- and long-term impact of your choices. An experienced attorney and financial advisor specializing in divorce can help you with important concerns; the ones you know about and the ones you don’t know about.

Do not speak poorly about your ex-spouse

Speaking poorly about your soon to be ex-spouse doesn’t help your children. The more honorable you act during and after the divorce actually helps your children with their relationship to you and to your ex-spouse. It isn’t necessary to broadcast your emotions and/or your ex’s bad behavior 24/7, even if they are old enough to understand. Let children regardless of their age form these new relationships on their own. Don’t hide your emotions - they make you human.  Own being angry, sad, hurt, or rejected, by modeling these emotions as an adult using effective and healthy coping methods.

Do not stress out

Stressing won’t make the process any easier. To get through a divorce in one piece takes time and quite often help.  Taking care of yourself and staying healthy through the divorce process will make a big difference in how you make decisions.

You may need to speak with a therapist to get through this tough and often sad situation. Figure out what makes you feel good and make it something healthy! Read a book, get a massage, finish a project, go for a run, or hit some tennis balls. Do whatever helps you stay balanced, even if it is only for a short period of time. It’s normal to have a bad day and lose it, or wish something bad would happen to an ex, but don’t let those emotional moments rule your behavior. Let your professional team support you. Most important, don’t do anything that results in an orange jumpsuit - it isn’t worth it in the long run. What is worth it is taking care of yourself so you are able to enjoy the rest of your life in a meaningful way.


Summary
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Effective financial planning and a realistic understanding of your options as you navigate divorce are critical. A strong, experienced and collaborative team of professionals, lending unbiased support, can educate you and best assist you in optimizing your settlement or outcome in court.

Divorce when you are older typically means more assets – and more to potentially lose. Financial mistakes made now are hard to recover from. The aftermath of divorce, re-entering the job market if needed and living longer on limited assets can all exponentially increase your stress. Stay healthy, use positive coping methods and assemble a strong team that will help you get through one of life’s most stressful situations in the best shape possible - so you can reinvent the future you want.


More expert advice about Money and Divorce

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Clari NoletWealth Advisor

Clari Nolet, CDFA(TM), is dedicated to helping women thrive financially and otherwise after a divorce (just as she did many years ago). Clari’s mission as a women’s personal wealth advisor is to educate and enable clients clearly visualize their...

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