How I advise clients on divorce after my own

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Divorce is among the most difficult of life experiences. When working with divorcing clients, I communicate the following lessons I learned when going through my own.

1. Never assume rationality

My spouse and I thought we’d be able to split everything in a fair and equitable manner.
Unfortunately, we discovered that we had different definitions of fair and equitable.

Couples with a history of battling over differences of opinion will find this tendency is amplified during the divorce process. So I always urge my clients to be very detailed when it comes to the division of assets and their parenting plan.

All the variables that might come into play, including minor ones, should be worked into the documents, even if the attorney says it’s unnecessary.

2. Think about what’s most important to you.

For most people, the goal in getting a divorce is to have a happier life. When there are children involved, you want to ensure a secure life for them, too.

But what might that better life look like? I ask my clients to make a list of what they need to move forward in a positive direction. Then we identify the specific assets that would help contribute to the life they envision.

I emphasize the importance of compromise. I ask my clients to list everything they own, both jointly and individually. The financial affidavit will list these items, but going through the process in a more informal way will help facilitate that filing and provide a checklist of what’s most valuable and what’s worth letting go of.

Clearly, the list would include all investment and retirement accounts, hard assets and real estate. But what can sometimes be overlooked are items that hold purely sentimental value. Clients should be sure to include those, so they can avoid the possibility of going through arbitration over trivial items.

3. Know what you’ll be able to afford after the divorce.

Fixed expenses are easy enough to tally — mortgage, utilities, car payments, etc. Variable expenses and discretionary spending can be more challenging to quantify. But it’s how these expenditures will change after the divorce that can be most difficult to estimate.

This process requires time-consuming reflection. Which expenses will increase when there are two separate homes to maintain? Custody arrangements and responsibility for tuition, school supplies and extracurricular activities can add further complexity.

If money is tight, this exercise will be helpful in determining areas where spending must decrease. It will also help in calculating alimony and child support payments.

4. Don’t go it alone.

There are many people available to help on both a personal and professional level.

In terms of professionals, having a good attorney can be crucial to navigating the judicial system and ensuring a fair and equitable division of assets.

I also point out to clients the benefit of engaging a CFP or CDFA, who, more so than the lawyer, will know the rules and nuances involved in the division of certain types of assets and accounts. To round out the team, include a CPA, particularly when hard-to-value assets are involved.

5. The job is not done when the divorce decree is final.

There are, of course, details to attend to once the divorce decree is finalized. Some of these should be done immediately, including canceling joint credit cards and updating insurance policies.

Then there’s the matter of transferring assets as agreed upon, and reviewing and revising wills and estate plans. The attorneys will handle many of these details, but they must be followed up on to ensure they are done in a timely fashion.

The most important lesson of all may be that it’s possible to get through the experience of divorce wiser and able to embrace a new life of happiness — and financial security.

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Client communications Client strategies CFPs CPAs Financial stress Career moves