Gray Divorce – Getting The Right Help

Debbie meets with a CFP® at the office. Her husband informed her last week that he wants a divorce. She says that they have been married for 27 years and that he has enjoyed a successful career life. She has been the homemaker for the majority of their marriage with only a few years early on working in retail. Debbie is now 55 and fearful for her future; her husband has always handled everything concerning their finances and financial affairs. She always felt safe and provided for. She has no idea how much he actually earns or the actual value of his other employee perks works, what kind of retirement savings are in place (just that there is something) or the full picture of the many investment and bank accounts in place. She breaks into tears as she explains the situation, ashamed of her ignorance. While this doesn’t describe every situation, when couples in their 50s and 60s divorce there is less time to recover financially from the experience and the fallout can be devastating. The revelation may be shocking and the parties left reeling. Some couples are able to manage the entire process amicably and with a great deal of respect for one another; but there are those cases that end up very ugly, taking a huge toll and dragging out over years. Once a decision to divorce has been made, deciding where to begin and who to contact first is very important. Divorce is more than just the splitting of assets; it can become the largest financial transaction one can engage in. So consulting with a financial acumen before ever speaking with an attorney can be key to coming to an agreement on a fair settlement. Seeking advice from friends and family should not be solely relied upon. Instead, developing a team consisting of a counselor, a mediator (if needed), a CFP® and divorce/family law attorney before any moves are made can lead to a less costly and smoother process. The best settlements address the primary concerns of both parties, while equitably dividing property and income so that one party does not become destitute shortly after the divorce while the other party’s lifestyle continues uninterrupted. Having said that, the decisions and negotiations can be agonizing; alimony, financing college, family dynamics, and decision over the marital house. A CFP® who has established expertise in property/asset issues involving divorce can play an invaluable role in the division of defined contributions or defined benefit retirement assets; having insight that divorce attorneys may lack. I worked on one such case recently where the plaintiff’s attorney drafted a disastrous final settlement against the defendant; it all had to do with retirement assets. CFP®s can contribute to the summarization for the financial affidavit, provide objective information on different projected financial scenarios or provide keen insight and strategy into property divisions being discussed, tax implications, arrive at a reasonable spousal support level and period of maintenance, or the reality of pre-conceived notions of entitlement. All of this is important when drafting a settlement proposal with agreement as the goal. Their role is to help the client understand the financial implications of the settlement, all assumptions being used, and the forecasting of economic future. An experienced CFP® may be able to assist anguished clients post a divorce. A strong knowledge of QDROs can prove invaluable. A client called my office describing an agonizing two-year red tape battle over court ordered pension funds as part of an alimony settlement which were being denied. It was not long after I stepped into her situation and began communicating with the Federal Office of Personnel Management that her funds were released. Not only did the client begin receiving her anticipated income, but a lump sum of money she didn’t know she was entitled to. It is days like this that I experience overwhelming satisfaction and personal gratification for the work I am able to do, in serving others.

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