Divorce can create fear and uncertainty. If you are preparing for, in the middle of, or have finalized your divorce, we can provide you with immediate clarity of what assets you have and how your new life will look financially. We specialize in working with the so-called “outside spouse,” a term for the spouse that hasn’t been involved in managing the investments, selecting insurance, creating budgets. The “outside spouse” typically doesn’t have strong relationships with the family attorney, CPA, or financial professional. Once separated or divorced, the “inside spouse” may already have the experience and relationships to transition financially, but the “outside spouse” has to start from scratch.
For the spouse not involved in the finances, suddenly being responsible for their share of assets and investments can feel overwhelming and freightening. We understand the need to provide support and peace of mind in the face of such extreme adversity; and bottom line we are passionate about helping clients manage their divorce. According to one study, following a divorce, the woman’s standard of living plummets by 27% while the man’s improves by 10%. Regardless of how affluent the couple is, there is often a great deal of worry and concern about their individual financial futures. After years of working with the “outside spouse,” three distinct fears have emerged as the most common.
While some degree of uncertainty and apprehension is to be expected, with a little diligent work and thorough planning, the following common divorce fears can be eliminated as well as help the “outside spouse” feel more confident and secure:
Fear of not getting a fair share: If the finances are complex (e.g., multiple homes, employer stock options, closely-held business, illiquid investments, separate property, etc.), it can become very difficult. The solution is to answer these two questions: What do we own and what is it worth? The next issue is to arrive at a fair value for each asset.
Fear of not knowing what you’ll have: This is a completely justifiable fear, because in a divorce it is easy to get lost in the details and lose sight of the bigger picture. It’s critical to stay focused on what your finances will look like post-divorce. This starts by knowing how much you have, what you have, and where you have it. For example, $1,000,000 equity in a house is very different than having $1,000,000 cash in the bank, or $1,000,000 worth of stock in your spouse’s business. Get clear on your assets and you can get rid of your fears. We help to make sure you are not only getting your fair share, but that you aren’t getting stuck with illiquid assets while your ex gets all the cash.
Fear of not knowing how your lifestyle will be affected: We’ve discovered that this fear primarily comes down to cash flow. After child support, alimony, employment income, investment income, and basic living expenses, how much will be have left? How much can I afford for a home? Can I still take vacations? Can I still fly first class? These are valid concerns that cause soon-to-be divorcees sleepless nights. To dismiss this fear, we create a comprehensive, yet simple post-divorce income and expense report so you can quickly see how your new finances will affect your lifestyle. We also create a customized investment plan so you can get the most growth and protection from your assets.
When going through a divorce, it’s common and normal to experience a wide range of emotions from worry to excitement and anger to contentment. For the “outside spouse” who isn’t as involved in the couple’s finances, fear and uncertainty regarding money are very common. However, with some thoughtful and purposeful planning , you can feel more confident and secure about your financial future.