Divorce is an emotionally difficult life event that requires a tremendous amount of change in the lives of everyone in your family. Whether you are contemplating a divorce or your spouse has taken the initial step to file for divorce, both parties should have a strategy to help navigate the situation with care so that it may result in a favorable outcome (financially and otherwise) for everyone.

As a Certified Divorce Financial Analyst (CDFA), I counsel clients on the early steps they can take to best prepare and protect themselves. Divorce may be something you have been contemplating for quite some time, or something that your spouse initiates and is a surprise to you.  Either way, it is never too early to seek support from professionals.  These professionals would include legal, financial and emotional experts who can help you to gain a clearer picture of your situation and your options, ultimately helping you to be more prepared as you move forward.  So, putting together your “team” is critical, as well as beginning to gather information about your financial situation.  This would include investment and bank accounts, sources of income, expenses, liabilities, and even benefits such as health and life insurance.  It isn’t necessary that all of this information be gathered before you file for divorce, but again, developing a clearer picture will help you to be more prepared as you think about your next steps.

Key Team Members May Include:

• A Divorce or Family Law Attorney. Even if you hope to mediate your divorce, you should still have your own legal representation.
• A Financial Advisor. This is someone who can help you to begin to evaluate and help you envision your post-divorce financial life.  In addition, an advisor helps you to understand the implications of how marital assets might be divided, plan for cash flow, and ensure the continuity of benefits like health and life insurance.
• A Counselor or Therapist. Depending on your situation, you may find it beneficial to have someone to help provide you with emotional support, someone to listen to you and help identify healthy coping skills.
• Extended Providers. Other members of your team may include a career counselor, a parenting coach or counselor, a tax advisor, and of course, friends or family members that you trust and can be a source of support as you go through this challenging transition.

Above all, you want to identify professionals who are a good fit for you – think of this as if you were interviewing a job candidate.  Asking for referrals from trusted advisors, or family and friends can be a great way to identify these important team members, and again, ensure that they are the right fit for you.

Sharing Team Members

In some situations, both spouses may work with the same professionals, such as a financial advisor, and it can feel extra stressful to feel as if you or your spouse feel you must suddenly find new team members to ensure that they have your best interests in mind. In our experience, these trusted advisors should easily be able to maintain separate confidential relationships with divorcing spouses. That being said, you will want to have different attorneys representing both of you to avoid a conflict of interest.

Men and Women: Is there a Difference in How We Should Strategize How to Approach Divorce Proceedings?

The legal process is the same for both women and men.  However, there are some planning differences that may need to be taken into account for females versus males.  For instance, women are often the primary care givers for the family, and many women forgo their professional careers to stay home with children, or even aging parents.  Accounting for discrepancies in earned income is important.  Will a female spouse who has been staying home with children have to go back to school to have greater opportunities in the work place?  On a similar note, women may be the primary custodial parent for children, and thus bear more of the expense related to raising children.  Again, this should be accounted for when determining child support and/or maintenance. And, as mentioned, women tend to be the primary caregiver not only for children, but for aging parents.  Building in an expense for support of an aging parent   into the financial plan may be important.

When working with a financial advisor, women should be planning for a longer life than men, and the need for their resources to potentially last longer.  These are some of the primary differences that are commonly seen between women and men as they plan for their financial well being both during and after a divorce.

After the Divorce

Once you are through your divorce, from a financial perspective, it is now time to do a thorough review of your financial plan including your goals, the resources you now have post-divorce, how you will manage cash flow, identify whether you need to change any of your insurance benefits, or update your estate documents.

As you work with your financial advisor to develop a clear plan for yourself, including a strategy that protects and grows your investments, you will be able to make informed decisions that will lead you and your family to financial success. You will be prepared for your future, and feel much more confident and secure in your well-being.

Additional Resources

• Webinar: Rebuilding Your Financial Life After Divorce