There’s an old adage that says, “Death is awful, but divorce is worse.” It’s true that in both cases, someone you loved is gone. However, after a divorce, the person you loved may not really be out of your life.
If you think the rate of divorce is slowing, think again. According to Fortune, a recent analysis by sociology professor Philip Cohen at the University of Maryland shows that the American divorce rate is slightly more than 50 percent – 52.7 percent, to be exact, with Baby Boomers leading the way.
The difference in loss can be substantial.
Divorce is a critical time to enlist the services of holistic financial planner who will place your interests first. In 2012, the U.S. Government Accountability Office released a study finding that household income for women fell, on average, 41 percent with divorce – almost double the loss that men experienced! A recent report by Bloomberg also discussed that when women with children divorce, they tend to sacrifice saving for retirement just to keep the family home, which can be a big mistake down the road. It takes careful planning to regain what you may lose in a divorce situation, and an experienced financial planner can guide you through the transition, while helping you stay objective and focused.
Steps to Take
If you’re facing a divorce, the first step is to get organized. Huffington Post blogger Karen Covy, a divorce attorney and life advisor, offers 10 Financial Mistakes to Avoid in Divorce, and many of those mistakes involve failing to gather the documentation needed to understand your financial situation in its current state.
A second step is to find family members or friends who understand money issues and with whom you can discuss these things. They can help provide guidance as you prepare to meet with a financial professional.
Finally, don’t wait to see a financial advisor – in particular, your own financial advisor -- until after your divorce is final. An article in Money demonstrates an unfortunate example of a woman whose advisor was working with both spouses, and was unaware that her husband hadn’t disclosed a home-equity loan on the house she received in the settlement!
It Takes a Team
Women in divorce situations often find it necessary to assemble a team of professionals to ensure they receive the proper legal and financial advice. As the Money article points out, law school doesn’t offer the proper training to enable lawyers to offer competent legal advice. The reverse is also true. However, many attorneys and financial advisors do keep a stable of professionals they work with and can recommend.
Even though going through a divorce can be traumatic, it’s important to take a deep breath, harness your emotions, and turn to those who are most qualified to help you through the situation. At M.J. Smith & Associates, we specialize in helping women in transition as a result of divorce, death of a spouse, or receipt of a significant inheritance. If you find yourself in one of these situations, please feel free to contact us for a complimentary, no obligation consultation. It would be our privilege to help.
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