There is a recent article from the Reuters news service that discusses the growing need for professional financial advice during the divorce process, specifically in the Collaborative and mediation processes. The article is directed to financial advisors as a potential niche service to new clients. What’s really interesting is how divorcing couples are beginning to use financial advisors during the process.
The article refers to the concept that the financial advisor has to look at the spouses “as the couple they were and as the individuals they are going to be.” While that is certainly a quotable phrase, it doesn’t quite fall in line with my experience.
The spouses I have worked with over the past ten years were definitely individuals during their time as a couple. Their unique and incompatible personalities and values were stronger than their desire to stay in the partnership. That is one of the reasons why they were getting a divorce. These people had much the same financial goals prior to the divorce as they had during and immediately after the divorce. The divorce financial advisor helps these people to continue pursuing their goals separately instead of together.
Advising couples in divorce is like taking a 1,500 piece jigsaw puzzle, dumping all the pieces out, and trying to put together all those pieces into two separate and complete puzzles of attractive but different visual images. The financial advisor needs to have creativity, analytical skills, financial planning expertise and financial literacy coaching skills.
In the Reuters article, the last line is the best line: “It’s very illuminating for each side to see what the other will face financially.” That reminds me of when I was helping a divorcing couple who had hugely disparate levels of income. The wife had seemingly endless sources of money, while the husband hoped to earn enough to cover basic expenses. After I analyzed his realistic cash flow prospects and met with each spouse, his wife fully realized his limited income and the influence of his probable neighborhood choices on her beloved small children. She then chose to use her separate property funds to buy a house for him in a neighborhood that was safe and appropriate for her children. Here was a Collaborative Law situation where the couple settled on a non-traditional property agreement that placed their pride secondary to their love for their children. That’s just as it should be.
Contributor: Tracy Stewart, http://www.texasdivorcecpa.com/ financial professional in College Station. Her credentials include CPA/PFS/CFF, CFP and CDFA.