Female Advisor Perspective | Power, Purpose and Finding Control in Divorce
In divorce, every single person’s experience is different. The confluence of emotions is different. The arc of the process is different. Meaningful support looks different.
As a person who has gone through divorce, and a financial advisor who has helped clients across the arc of that journey, I can say one thing for certain - every single person’s experience is different. The confluence of emotions is different. The arc of the process is different. Meaningful support looks different.
THE FINANCIAL PIECE OF DIVORCE
Image by Shubham Dhage
The financial piece of divorce can be as complex as the emotional journey. With that said, the financial piece can also be a surprising source of strength, a place where control can be both visible and explicit. Because of the very tangible nature of the money side of divorce, and because women have natural skills with which to tackle the topic, grabbing control here early can be an unexpected source of empowerment, creating a spark for broader positive momentum.
The importance of discipline, process, common sense, and prioritization of goals in financial decision making make women naturals in the financial arena. Often however, unnecessary complexity can make people feel intimidated, leaving them unaware of this hidden talent. When the pieces and the process are laid out in clear and straightforward terms, moving toward goal becomes a positive from both a practical and emotional perspective. This step toward financial control can make the future on the horizon take shape sooner and with more clarity.
In our upcoming series Power, Purpose, and Financial Catalysts in Divorce, we will address how to shape a process that leverages the power of organization and natural financial aptitude to enable better outcomes on many levels.
The series is divided into five parts. If I had to pinpoint a singular theme, it would be gaining control.
Foundational Decision-Making Framework
Financial Organization for Control
Clarity to Create Understanding - Finance 101
Cash Flow, Values and Outcomes
Roadmap for the Future
Foundational Decision-Making Framework
The first installment of the our series, Female Advisor Perspective | Power, Purpose and Finding Control in Divorce, addresses the ‘how to’ of building a decision-making framework that empowers.
Early in the process some foundational work is required. This early work helps to both answer questions and put a framework around the process. This is the first step in establishing control.
Get basic legal, practical, and financial questions answered so that there is a clearer view of how these things fit within central question of whether a divorce is the right path for you.
Make a list of the legal questions you wonder about and ask a legal professional. Most divorce professionals offer an introductory call free of charge.
Make a list of financial questions and ask a financial professional. Most financial professionals offer an introductory call free of charge.
List and prioritize your most practical questions.
Who will pick up the kids? Who will pay the bills?
Do you have a bank account in your name that can provide a financial cushion during the early transition before a judge weighs in on financial responsibilities?
Do you have a personal email account that is new and specific to the divorce?
This list is for you. Once you have the questions, formally lay out your preferred answers and your plan.
Questions for the Experts
Image by Giulia May
Here are some ideas for the types of questions you may want to ask a legal or financial professional.
If I were to divorce, what is the process? What are the different options and paths? Is mediation an option? What are my rights? What do I not know? How long will it take?
How much will you charge and when do I have to pay?
How should I think about my cash flow needs?
How would I ‘discover’ all of our assets? How do I know how much our illiquid assets are worth? Who will pay the taxes?
How do I pay for professional fees? if my spouse has been the primary earner outside the home and has accounts in their name how can I get the financial resources to even start the process? A quick note on this point:
If you are eligible as a ‘dependent’ spouse (have taken care of nonpaying in home responsibilities, qualify for alimony payments or other post-separation support), you can petition the court for an award of attorney’s fees, etc.
An order awarding Spouse 1 attorney’s fees means that Spouse 2 must assume legal responsibility for Spouse 1’s reasonable legal costs. Certain financial advisory fees may also be recoverable.
An award of attorney’s fees can also be available if one spouse has behaved in bad faith and caused the litigation to drag out unnecessarily.
If an award of attorney’s fees and other professional feels would not be applicable to you but you still face difficulty paying your legal fees, you can also petition the court asking for an advance of your portion of division of property from the divorce.
Who will cover living expenses if I have not been working outside the home and therefore lack cash flow? The answer varies by state, so ask a professional. Generally, if one party has worked inside the home while the other has worked outside of the home, necessities such as food, shelter, clothing, and medical expenses are generally covered by the party working outside the home.
BUILD YOUR TEAM
If you decide to move forward with the divorce process, deciding on the members of your team is the next major step. Set up interviews to establish quality and fit; both are critical. The members of the team will include:
Divorce Attorney | Mediator
A divorce attorney helps to organize the process of thinking though big picture questions and laying out a plan of action. She or he will be able to answer lots of questions about the process and your options. Finding good legal representation is job one as the process begins.
Financial Advisor
A financial advisor helps you gain control over the financial picture. A financial advisory relationship early in the discovery process, BEFORE decisions are made about financial elements of the divorce, helps ensure fair outcomes and can help you build a sense of financial control early in the process. During this time a good advisor will help you:
Learn about the assets
Get your own budget and cash flow in order
Establish your own accounts and goals
Ensure the valuation of assets and securities is fair (especially important for illiquid assets)
Ensure the types of assets transferred are equitable and fairly valued
Handle the mechanics of asset transfer
Help establish a list of qualified referrals for other professional needs, such as accountants.
Financial advisors will be a partner through the process and often become part of your team post-divorce as well, so a thorough interview process that thinks about this full arc is important. An advisor who can fulfill this role will take the deep personal connection that is developed through the process and bring it full circle to a financial plan that builds your dreams into the future.
Some financial advisors will only take on clients once the divorce is very late stage and assets division in on the horizon. Advisory firms that offer options for early-stage involvement, that is targeted at building financial control early, likely have a deeper understanding of how impactful this control can be.
Accountant
An accountant will help sort through any tax related questions that arise as assets are divided to ensure that you do not end up with an unfair share of the tax burden. Often the accountant is brought in a bit later in the process. Your financial advisor can be an excellent resource in developing a list of referrals that might be a good fit and with whom they have firsthand knowledge of quality.
Divorce is hard. Moving through the process in a way that focuses on finding ways to establish ‘control’, can help to create positive momentum that builds on itself. This can have a long term impact on you, your relationships and outcomes. Check back with us for part 2 of the series – Organization for Control.
Simplicity, purpose, control
Join us for the next installment of Female Advisor Perspective
ABOUT THE AUTHOR
Susan Dahl is a well regarded executive, female industry leader and dedicated client advisor with over twenty-five years of experience. Susan writes on topics such as investing, strategy and financial planning, and is the author of the blog series Female Advisor Perspective, a look into the unique strategy, process and planning insights that emerge when problem solving is viewed through the unique lens of experienced female financial advisors. Susan’s deep and diverse background extends from global investing to risk management to change leadership. This background has laid the groundwork for an approach that asks more of wealth. She shares some her most recent work in a talk for TEDx, Can Happy Make You Money?
