No one goes into a marriage expecting for their marriage to fail. It can be one of the most draining experiences emotionally and financially. For those experiencing divorce, you are not alone as 50% of all first marriages in the U.S. end in divorce, according to the American Psychological Society. That statistic is even higher for those marrying a second time. One of the focus areas during a divorce is finances. This can be a grueling process as you sift through such a big life change. If you don’t have a financial plan in place to protect your postnup assets, the cost of ending a marriage, living on less and becoming a single-earner household can be destructive to your assets as the Great Recession was.
When marriages are going well, couples participate in financial planning as a team, developing personal budgets, and savings. Ironically this is the best time to discuss the dividing of assets. We have had clients experience divorce and know that the due-diligence of previous asset division and financial planning conversations play a key role when anticipating a divorce, during the divorce proceedings and especially when the marriage ends.
For those divorcing, we advise working with an attorney and a financial advisor, such as True North Advisors, that specializes in asset protection. Divorces can turn into an asset battle and leave financial and emotional scars when they aren’t divided equally. Studies find that the divorced spouse needs more than a 30% increase in their income to maintain the same standard of living they had before divorcing.
At True North Financial Advisors, we have members of our team who are Certified Financial Divorce Practitioners (CFDPs) and specialize in advising clients (sometimes both spouses) going through a divorce. Our CFDP’s are well aware of the negative effects of fighting over assets and we help clients work toward maintaining those assets and their retirement savings going forward. Our goal is to help keep each client on track financially, despite this difficult situation. When we find a solution for dividing assets without fighting between attorneys, the couple stands to win by ‘playing nice’ helping to preserve what they worked so hard to achieve together before the marriage fell apart.
At True North Advisors, we believe it’s important to support each scenario with strategies to make divorce as smooth as possible for our clients. The impending divorce helps us educate our clients when we discuss personal budgeting, insurance coverage, and the cost of raising children. The financial advice moves toward asset protection and guidance as we become their financial counselor. After the divorce, our relationship with our clients becomes that of a wealth advisor.
When our existing clients experience divorce we remain impartial as both are equally important while we continue our relationship. True North Financial Advisors can’t provide legal advice about divorce proceedings but can provide financial advice regarding the liquidation of assets. The effects of dividing retirement accounts, future retirement savings and budgeting for a single-earner household are common questions you may have.
If you are experiencing divorce and need guidance we are here to help you live a more fulfilled life before, during and after you face this major life change.