Financial advisors must understand that divorce inherently creates several unique challenges that typical clients will not face when it comes to plotting their fiscal future.

Some of these additional demands divorcing clients face include compromised emotional stability, complex financial scenarios, and an environment of extreme uncertainty, which can make it far more difficult to create a clear roadmap for their financial future.

While family law attorneys are acclimated to working under these conditions, it may be a shock to the system for a financial advisor unfamiliar with the added pressures. However, if an advisor becomes familiar with performing their tasks throughout the divorce process, it can be a major benefit for both the attorney and the client.

Please note that establishing a working relationship with the client’s attorney is crucial early in the divorce. The financial advisor must clearly receive permission from the client to share and receive pertinent data regarding the case with the attorney. Only after an absolute understanding that information exchange is acceptable can this mutual relationship be utilized.

To better prepare yourself for the additional challenges of working with a divorcing client, it is useful to have an idea of what these challenges entail.

Emotional Instability
Divorce generates a veritable firestorm of emotions for those going through the painful process ranging from anger and betrayal, to depression and resignation. This can create a situation where it is extremely difficult to tell if a client is capable of making the crucial decisions that will impact their future for years to come.

It is imperative that financial advisors independently satisfy themselves — apart from the judgment of the attorney — that their client is in the right frame of mind to make these decisions. Because divorce attorneys are accustomed to their clients giving them the reigns, they may take it for granted that clients are challenged in this way.

Lawyers are prone to proceed with the process even though their client does not fully comprehend what is happening because it is fairly universal what divorcing clients want: More money, less debt, lower alimony payments (or higher if they are on the receiving end), etc. Financial advisors do not have quite as much liberty to make these assumptions, which to a certain extent makes their job more difficult.

Ensuring clients have the mental capacity to comprehend and make decisions regarding their finances is a complication that all advisors will face.

Educating Clients
Divorce forces people to think about aspects of their finances that many have likely never put to mind, and while education is innate to financial advising under any circumstance, divorce creates a great deal more complexity.

While clients may have a pension plan or own and run a business, they likely have no idea how the valuation of these assets will come into play during a divorce.

Financial planners are uniquely suited to fill the educational role for these aspects of divorce — even more so than attorneys in many cases simply due to the rate differential between financial planners and lawyers.

Family law attorneys are some of the highest billed lawyers in major cities, and the reason is pretty simple: Wealthy clients are not going to pinch pennies when it comes to protecting not only their current substantial assets, but also their earnings in the future as well.

Contrary to popular belief, attorneys are very conscious of the time they spend on clients and are not in the business of squandering billable hours. Because of the rates attorneys charge to stay competitive in their respective markets, they want to avoid any unnecessary billing just as much as the clients do. This creates a situation where clients are often perfectly fine being left in the dark if it means they are only paying for their attorney’s time when it is essential.

It is not unusual for highly-rated attorneys in major markets to charge upwards of $800-1,000 per hour, and a financial advisor will likely bill at less than half of that.

Both attorneys and clients can benefit from the financial advisor taking on the role of educator. If the advisor is able to teach how assets are likely to relate in divorce, the client will be better equipped to make decisions regarding their financial future.

An Uncertain Environment
Ambiguity is the nature of divorce. It is a slow-moving process with many pieces that dramatically affect each other from the beginning to end, which makes it difficult to develop tangible plans far in advance. This can become a source of frustration for clients who want to nail down concrete plans as early as possible — particularly for men.

Clients may wish to start laying the groundwork for their future based on certain assumptions about what their wife or judge is going to do that may be unrealistic. Under those circumstances, it is the job of the financial advisor to avoid locking into deals that may not be plausible or in the client’s best interests.

When there is still a long road to finalizing the divorce, flexibility is often an advantage. The financial advisor should allow the process to progress far enough that there can be reasonable confidence that the client’s assumptions are correct.

It may be better to develop several alternative scenarios by interacting with both the attorney and the client to find out what the most probable scenarios and develop different plans based on the various likely possibilities.

Not every divorce will involve all three of these layers, but there will likely be at least one of these aspects that impacts the financial planning process.

Forecasting someone’s fiscal future is almost never a simple matter, and divorce significantly complicates this already multifaceted process.

However, the skills of an experienced financial advisor add a level of clarity to the chaos of divorce and helps bring a level of understanding and certainty to the client’s future after the ink on the decree has dried.

Joseph E. Cordell is the Principal Partner of Cordell & Cordell, a domestic litigation firm focused on representing men in divorce. Since co-founding the firm with his wife, Yvonne, in 1990, he and his team of almost 200 attorneys spread across 93 offices in 28 states have helped tens of thousands of men going through divorce.