There are many reasons why it's important to get a financial adviser involved as early as possible during a divorce, and that would make a perfectly fine blog post.
I have however, decided to focus more on personal stories than generic tips, as this may resonate with you far more than a checklist of items.
This is the first post in what I hope will be a series of short stories about clients I’ve worked with and how bringing me into their divorce process provided financial and emotional benefits, as well as giving them back valuable time.
I have removed or altered details enough to protect the identities of my clients.
Client Divorce Story: Just Surviving
In this instance, my client had moved out of the family home and was co-parenting four kids, each with their own challenges and special needs. Historically, this was easier because her husband was the primary income earner. Now, my client had to balance earning income, running the household, and coordinating care for the four kids while going through a divorce.
When we first met, I asked her how she was coping. "Just surviving" was being generous. For the longest time, my client had been the caregiver, a healer by nature, made possible because her husband worked full-time and provided financially. However, as sometimes happens, the marriage had broken down, and she had felt uncared for some time.
Setting Goals
One of the exercises I run with all clients is a combination of the WOOP goal-setting framework and Maslow’s hierarchy of needs. I use this to give permission for my client to think about themselves and what they want, which is especially powerful when they have spent years only thinking of others.
Looking at 10+ years, what does your aspirational life look like? (Wish)
Describe that outcome – where are you living, what are you doing for fun, for fulfillment, for social connection, for community and legacy? (Outcome)
What are some of the obstacles? (Obstacle)
And positively, what are the milestones at 3 years’ time that we should be reaching to be on the right path?
Again, where are we living, what are we doing for work, fun, fulfillment, social benefit, community and legacy?
Now what do we need to do to get there? (Plan)
It’s important to note that there is some initial work involved, such as addressing any short-term crises and achieving quick wins to allow for future thinking.
My client had not been able to think past the next week, let alone 10 years down the track. She wasn’t dreaming of an impossible life, just one where she felt fulfilled, could be a present parent for her kids now, and eventually join a community singing group. She also wanted to start running again.
Vision Guided Advice
This exercise is different for everyone. Some people are more creative, some simpler, some aspirational – the key is that we take the time to sit down and think it all through. With this information, we set a beacon to aim for. A light at the end of the tunnel.
We were able to do just that, finding a financial split that enabled a comfortable and fulfilling life for my client, now but also long-term. This was a plan up to and through retirement, but set in motion before the divorce finalized, giving my client peace of mind now instead of having to wait until everything had settled before knowing if she had made sound decisions.
Client Divorce Story: The Financial Agreement
COVID put a lot of pressure on relationships, and this client was not immune. He was a senior medical professional, and she had taken care of the house and the kids. With no outlets, COVID brought out tensions that made living together untenable.
I worked alongside another advisor in this situation, who worked with her husband. This enabled more informed decision-making and made both parties feel supported.
This didn’t mean the whole relationship went down in flames. When you’ve been married for 30+ years, you can still care deeply for each other. To avoid rash decisions, they made a decisive move and bought another apartment.
My client lived in the family home due to her stronger emotional connection and closer social network, while her husband moved into the new apartment, which was also closer to work. Until this point, she lived on the credit card, and he paid it off each month and covered the bills, having managed the money throughout their relationship.
With tensions came mistrust, and this was a major reason she sought me out. She felt he was not disclosing information, or at least she had no oversight of their financial position.
He felt she was overspending and had no control over the money. The truth was somewhere in between:
My client had no context of spending, having not managed household finances she didn’t know what a reasonable amount was each month.
Her husband, while not withholding information, never took her through the finances as she had never expressed interest.
Trust and Context
Through this process, we were able to close both the trust and knowledge gaps, which significantly reduced tension and resulted in more amicable discussions with regards to their options for asset division. There was complexity in their financial situation including trust structures and multiple properties (including one rented to a child), so having high trust and clear financial modelling was key. Ultimately lower stress in the short term meant my client and her ex-husband could manage day to day finances amicably, and granted them more time to make better decisions, preserving their relationship in the process of getting to a viable financial agreement.
In Closing
Everyone’s situation is different, but at the end of the day, we want to feel valued and regain a semblance of control when our world has been rocked by separation. Hopefully, these stories show that financial advice during divorce is more than just about money; it’s about values, life, aspirations, and fulfillment. Success isn’t just about having more money (though that is nice), but having a purpose to use it for.
If this blog format resonated with you and you’d like me to share more stories like these, let me know. If you are going through a divorce or separation and think a financial advisor can help you, please get in touch.
