While it’s true that 40 to 50 percent of all marriages end in divorce, very few people go into it with that mindset. When you also consider the fact that most divorces occur between the ages of 55 and 64 — just as many are looking forward to the “golden years” of retirement — it’s easy to see why divorce can be one of the most catastrophic events in a person’s life.
The shock of a divorce, in addition to its emotional toll, can seriously sidetrack financial wellbeing, often leaving a person feeling one of two ways: overcome with anger and resistant to any negotiation, or willing to forfeit everything just to get the difficult process over with.
Both scenarios, while perfectly understandable, are fraught with pain and loss. That’s why whether you’re seeking the divorce or not, sometimes the best thing you can do for your future is take a deep breath and consult an experienced, trusted professional. In many ways, the most important role Bartlett wealth management advisors play for our clients facing divorce is that of level-setter. We help them remain grounded and calm, visualizing their financial big picture even as emotions run high.
To illustrate, our team was recently approached by a client in her late-50s whose spouse was the primary earner for more than 30 years of marriage prior to filing for divorce. The first step in helping our client navigate this painful roadblock was to listen carefully and begin laying out a big-picture view of her divorce settlement and her options for separating a complicated list of assets that went beyond the couple’s home and bank accounts to include an executive compensation package, stock options, and more.
Next, we began exploring our client’s life and retirement goals — plans she’d made in her marriage as well as her own personal interests, lifestyle preferences, and hopes for the future. We determined that, in her mind, the best possible outcome would be to own a home mortgage-free — an ambitious goal, but one that wasn’t out of the question based on the details of her divorce settlement. We then assembled a revised picture of what her financial life could look like on her own.
Finally, we began bringing that picture to life by helping our client create and implement a financial plan to achieve her goal (which ultimately necessitated taking out a small mortgage to cover the gap period after the sale of her previous home). Since our client didn’t have much work experience to speak of, we counseled her on the importance of building credit. We showed income, saving, and spending plans designed to preserve her settlement and other resources for the rest of her life.
Divorce is never an easy process, but as this scenario demonstrates, it doesn’t have to permanently derail a person’s financial future. Connecting with a financial advisor as soon as possible ensures much-needed peace of mind in a turbulent and difficult time.