I’ve never met a person who married with the intention of getting divorced. However, the unfortunate reality is that half of all marriages will end this way. Even with such a staggering statistic, divorce can feel like one of the most isolating and lonely times in a person’s life. Along with the emotional toll it can take, divorce also has the difficult business side to it that can cause just as much stress and heartache. Navigating the dissolution of marriage can be tricky. But, by building the right team to support you during this incredibly difficult time, you give yourself the opportunity to end the marriage in the most equitable way possible.
Having the right financial advisor for divorce is going to make a huge difference in how you come out on the other side. Knowing who you can count on for emotional support, legal advice, and financial advice will be key to your success.
Find a Great Counselor
While friends and family are great to talk to, they will have a biased view and opinion (wanted or not..) of the situation which could turn into bad advice and cloud your judgment. Working with a professional counselor will provide you with an outsider’s point of view and help you navigate tough and raw emotions. Having your emotions in check during the divorce is only going to help your situation in the long run as you make big and important decisions about your future.
Hire an Attorney
While it is admirable that many couples wish to proceed with a divorce without legal representation, most divorces need proper legal guidance. Divorce involves the separation of a partnership and assets. This can become complicated, and it is best to hire an attorney who is familiar with all the laws related to divorce and the splitting of assets. A good lawyer will understand, explain, and advocate for your rights so that you can make the best decisions possible about your future. While attorney fees can pile up quickly, their expertise can often be the difference between getting what you are rightfully entitled to. Carefully choose your divorce attorney. Not all attorneys are created equal. Some may be better suited than others for your particular situation. For example, those with higher levels of wealth or have complicated financial or custody issues should seek out an attorney with relevant experience. In addition, find one that will work closely with the Financial Advisor you hire.
Hire a Financial Advisor BEFORE You Finalize the Divorce
In many cases, individuals seek out a Financial Advisor after the divorce is finalized. However, by initiating a relationship with a good Financial Advisor at the beginning of your divorce, it can mean the difference between reaching your financial goals or not in the coming years or even decades. This is especially true for the spouse who has not been involved in making financial decisions for the household. A good Financial Advisor will also become your advocate, work alongside your attorney, and help you put a plan in place to make sure you get your fair share and then build out a comprehensive financial plan just for you.
Below are a couple of examples to illustrate why having a Financial Advisor during the divorce process can help further clarify this point.
Often, when it comes to splitting assets, the thought process is to split everything right down the middle. However, NOT ALL ASSETS ARE CREATED EQUAL. For example, let’s say the investment portfolio you and your spouse shared included $1 Million of invested stocks or bonds and $1 Million of private illiquid real estate holdings. The initial proposal would more than likely be to split both equally so that each of you ended up with $500,000 of each. But the big question is, are those assets going to serve you well as you transition to the next stage of life? If you are going to need cash flows and flexibility from the investments in the near future whereas your spouse won’t, holding real estate may not be the ideal solution. Rather, negotiating for the stocks and bonds while he or she takes the real estate would better serve you in the short and long term.
Another example is if there is a business involved. If you are entitled to 50% of your spouse’s business, it may be more advantageous for your spouse to buy out your share, rather than stay involved, so that you can wipe your hands clean and move on with your life. As a side note, if there are businesses and other types of private investments, it is imperative to get proper third-party valuations for any of these types of holdings before you agree on an asset split. A Financial Advisor can connect you with the proper resources for this type of work.
Having the right support of professionals during such a difficult time can play a significant role in helping you think through important decisions as the final negotiations occur and the divorce gets finalized. Along with your attorney and counselor, hiring a good Financial Advisor for divorce that does comprehensive financial planning can help you maximize what you get out of your divorce and help you think through your financial future. At ML&R Wealth Management, we have a of financial advisors in Austin with the experience necessary to help you navigate these tough times.
Please contact us with additional questions about this topic or any other.