No, I’m not going to provide pre-divorce and post-divorce financial checklists. Just Google these terms and you’ll find many quality checklists, including some from the archives of this publication. Many of the lists that you come upon will overlap, which is a good thing, as similar action items provided by different authors is somewhat self-validating. That said, I’m a big fan of lists; they provide an organized methodology for minimizing omissions when addressing a known universe. However, for many, this “universe” can be extremely daunting, which can make following a checklist for preparing finances for divorce rather mechanical, and on occasion, altogether misleading.
The realm of personal finances is complex stuff – especially for the spouse who isn’t in charge of “the family books,” such as the family budget and bill paying, brokerage and investment accounts, as well as interacting with outside professionals such as CPAs, insurance brokers, and estate attorneys.
The divorce process itself is mind-numbing as you work to provide your divorce attorney with an overwhelming array of documents, tax returns, details about your lifestyle and a realistic assessment of what you think may be your future lifestyle needs. Trying to assemble an overview of the broad field of your finances while undergoing the trauma of divorce falls somewhere between extremely difficult and impossible! Just as nobody with meaningful assets would attempt to represent him or herself in a divorce, if you’re not extremely facile with financial matters, you should not trust your financial future to a checklist.
Some spouses emerge from long marriages with no financial knowledge or investment experience, floundering simply because they are wracked by fear and confusion, leaving the moneyed spouse, as the more sophisticated investor, in a stronger negotiating position. This creates an uneven playing field. For most non-moneyed litigants in the midst of divorce, engaging a financial advisor who is experienced with matrimonial matters goes a long way towards leveling the playing field.
Financial advisors lead their clients through the maze of current decisions that may have long-term consequences. They also can support their client with concrete analyses, removed from the anxiety and anger that accompanies the divorce process. While one spouse may be financially dominant, with strong professional advice, the non-moneyed spouse usually will have greater influence on the outcome of the financial settlement.
While divorce attorneys are valued for their role in ensuring the successful division of finite assets, financial advisors consider the broader, longer-term financial picture divorce brings, including educating their clients as to their settlement alternatives. That is, they can help clients interpret and understand what a settlement offer really means in terms of their future lifestyle.
The most valuable advisor is one who possesses a deep understanding of the complexities families encounter as they navigate the challenges of financial and interpersonal conflict. An advisor is part financial expert and part counselor: He or she should be acutely aware of a client’s psychology, and understand what drives human behavior, to better safeguard assets and preserve income through turbulent times.