After a Divorce: Financial Confidence

financial independence

This is a hypothetical example of how we might help a divorced client.

Julie is looking for someone who can provide her with a complete financial plan, and would also help her to understand and implement it. By examining her complete financial picture, we provide recommendations that are designed to help the family law attorney negotiate her settlement with a specific financial outcome in mind. In addition, we help Julie build a new financial plan for her life going forward.

Julie is unhappy in her marriage and after attempts to reconcile, has decided to file for divorce. She is required to provide a statement regarding her financial position so that her attorney could analyze the available income for Julie’s monthly support and her attorney’s fees. Julie couldn’t prepare one as she had little idea of what her current financial position was.

She feels uncomfortable managing money and her credit card purchases had recently been over the limit. She is also concerned for her children, one of whom had special needs. Her main fear is running out of money as she had little work experience. She is also interested in going back to school and getting her life back on track.

We would be able to work with Julie’s divorce attorney to prepare a list of documents to subpoena from her husband to obtain a complete picture of Julie’s and the community’s financial circumstances, as well as the parties’ assets and debts. Later, our focus would be to help stabilize Julie’s uncertain financial condition by determining the long term impact of the proposed divorce settlement, using multiple financial scenarios. After the divorce, taking Julie’s personal goals and objectives into account, we follow up with the preparation of several post-divorce budgets, review insurance and estate planning documents, and develop a personal retirement and investment plan based on her projected resources and attitude towards risk. In the process, we may discover that Julie was underinsured, primarily with her Life and Long Term Care insurance. We would advise her as to the purchase of Life Insurance, Long-Term-Care insurance and Annuities, which could potentially help quell Julie’s main fear: outliving her financial resources.

The open and transparent communication between Julie, her divorce attorney and our firm, as her financial planner, would help helped ensure that Julie’s needs were being addressed and continue to be addressed in the future. Finally, we would coach Julie for six months during the transition post-divorce to becoming financially independent. Finally, we would coach Julie for six months during the transition post-divorce to becoming financially independent.

We would assist her in gaining skills that would help her feel in better control of her personal situation. We would continue to meet with Julie once each quarter to keep her on track with implementing her budgeting and financial plans. The main fear: outliving her financial resources. Life Insurance would help Julie protect her children and help maintain her family’s standard of living were Julie to become disabled or die prematurely. We would also work with Julie’s estate planning attorney to execute a new will and family trust, including the creation of a special needs trust for her child, put guardians in place for her children, and update her health care directives.
Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Investing involves risk and you may incur a profit or loss regardless of the strategy selected. You should consult a Financial Advisor before implementing any investment strategy. This is a hypothetical example and not meant to reflect the situation or any actual client or the performance of any particular investment. You should ‚Ä®consult a Financial Advisor before implementing any investment strategy.