December 18, 2015
I’ve made mention in previous writings of my passion for helping people through difficult times such as the loss of a loved one or a devastating divorce. What I’ve learned in my work with divorcees is that there are some very common themes.
Facing a life that looks very different than what you imagined, as well as a new financial landscape, may make you feel as though you are in an “emotional crisis zone”. It takes a lot of work to untangle your assets (and heart) from your spouse of several years. Couple all this with the fact that you will need to force yourself to focus on money related issues, and this can send even the strongest soul into a tailspin.
Everyone’s life and situation is unique, however the rough waters that most need to navigate when separating can be made calmer with proper planning and financial advice. Here are a few things that I’ve found very helpful for my clients experiencing divorce:
Divorce planning needs to take place at the start of the process once two people have decided to go their separate ways. Early entry into the process allows time to gather comprehensive financial information to be able to make more accurate forecasts/projections. This helps a lot when crafting a workable agreement and could save a lot of time, money, and heartache.
Don’t make any big financial decisions (unless absolutely necessary) until the dust settles. Emotions almost always work against a financial or investment plan. For example, with investing most people have the urge to sell when the market is low and buy when it’s high, even though they’ve been taught otherwise. There are many other examples that prove that big financial decisions should never be made without your calm, rational mind.
Build a financial plan now, not after the divorce. The type of plans we build are fluid, not set in stone. You don’t have to know where you want to be five or ten years from now. You do, however, need to know where you need to be next year.
Work with a financial team to answer the questions you’ve never had to answer. Whether it’s related to investing, budgeting/bill paying, or more complex tax or legal issues, a lot of it may be new territory for you. Your soon-to-be ex may have handled a lot of this in the past but it doesn’t all have to all fall on your shoulders now. And although these financial discussions can be difficult, decisions that you make now can have a very strong impact on your financial future.
Realize that a lot of your soon-to-be ex-spouse’s comments may come from a place of emotion, not logic, and that these too, shall pass.
Working proactively with someone who has your best interest in mind will bring you confidence during these tough and emotional times. As always, we’re here to help you or those close to you in times of need.
Jeremy Taylor, CFP®, ChFC®President, Mainspring Wealth AdvisorsCERTIFIED FINANCIAL PLANNER
You should discuss any tax or legal matters with the appropriate professional. Raymond James advisors do not provide tax services.