The process of divorce or experiencing sudden widowhood can be harrowing and draining. Many things you took for granted as being stable and always there may now be gone or in a state of chaos. Different financial and legal professionals are circling around you, each with their own particular agenda, operating in their own small silos and very much not in an integrated and cohesive way. You may well begin to encounter new, more ominous financial types looking to take advantage of you and your assets by offering “solutions” that generate big commissions for them but may provide you with little more than excessive risk, underperforming returns and damage to your liquidity. And you have to face making all these often life-changing decisions at a time when you may be near a low point in terms of your focus, clear-headedness and your ability to distinguish between the sheep and the wolves.
That is where Anglia Advisors comes in. If you are a suddenly single individual and less than 50 years old, a fiduciary CERTIFIED FINANCIAL PLANNER™ personal finance and investment management consultant will work with you on all financial projects and plans that inevitably emerge from these scenarios, both large and small. The engagement will be on a fee-only hourly basis under our Per Hour model so that you pay for as much planning and advice as you need and no more.
Optionally, you can also sign up for our high quality, no minimum Professional Portfolio Management that makes use of diversified, low-cost investments managed by a qualified CFP® investment manager on an award-winning, technologically-advanced investment platform. You will also be provided with unlimited access to the financial and legal professionals in the Anglia Advisors Professional Network, many of whom specialize in working with clients in these situations.
In these situations, so much of your legal and financial life will likely be undergoing the same turmoil as your personal life.
Some examples are:
Investments and savings. Sometimes substantial amounts of money are moving from one account to another following a divorce decree or probate. These amounts can be in the form of cash, stocks, bonds, annuities, pensions, insurance payouts, workplace retirement plans to name but a few, coming from banks, brokerage firms, employers, insurance companies, 401k and pension plan providers and others and each may need to be received and handled differently, including the critical need for beneficiary designation changes. You may well be at square one when it comes to making investment decisions for these amounts and, in some cases, people with little or no previous investing experience are expected to make some very significant financial decisions including investment decisions on life-changing amounts of money on your own or relying on the advice of well-meaning, but unqualified, friends and family. Worse still, you could fall victim to one the many predatory financial services firms referred to earlier.
Real estate. In most divorces, and often in the case of widowhood too, at least one party needs to move and often real estate needs to be sold and/or bought. People may move from owner occupation to rental. Or vice versa. Or sell a property of a particular size or in a particular state and buy another elsewhere. Every time any asset undergoes a forced sale like this, there is the risk that it will be at the wrong time in the real estate market or interest rate cycle, that counter-parties will smell desperation in the requirement to transact and take advantage and that perhaps the total unforeseen frictional costs (closing costs, fees to brokers, banks, mortgage lenders and lawyers, mortgage prepayment, moving costs, decorative work and repair, furniture purchases, possible temporary accommodation requirement etc) will run much higher than first thought. This can be overwhelming.
Insurance. In the case of widowhood, there may be some life insurance proceeds to accept. In a divorce, there will almost certainly need to be changes made to the terms and beneficiary designations of existing life insurance policies and very possibly a need to take out additional ones or adjust existing ones. Disability insurance may now be more of a priority than when you were married to another potential bread-winner. Existing long term care coverage may not now be available. Auto, homeowners’ and liability policies will need to be reviewed and very possibly updated or completely changed.
Estate planning. If you had no estate documents in place before the event, you will likely need them now. If you did have some in place, it is almost certain that they will need to be significantly altered to take account of the new reality - and very soon. Perhaps your spouse had been the one to find an estate attorney the first time around but now you need to find one yourself. Don’t do this blind. The Anglia Advisors’ extensive professional network has a of number estate planning attorneys with different specialities and price points.
Tax. While CFP® professionals cannot directly offer tax advice, they can often help describe and navigate the tax landscape, which may look very different for you if you become suddenly single. Third-party tax professionals from our professional network can be brought in to help to whatever extent is needed.
Minor children. Divorce decrees are likely to set a number of conditions upon the spouses regarding financial provisions for minor children, including education funding. Widowed individuals get no such direction given to them, they have to figure it all out themselves. In either case, a qualified financial advisor can be there for you to help ensure that directives are followed and that the children’s interests are protected by means of cost-efficient and tax-optimized savings and investment strategies for their future wellbeing.
There are plenty of other considerations that can come up, divorce or widowhood can affect your credit rating, your debt management, immigration status if relevant, loan/mortgage eligibility and much more.
Your dedicated CERTIFIED FINANCIAL PLANNER™ professional can work closely with other legal, financial and medical professionals and select family members if you wish or it can be an intensely private engagement. It is completely up to you.
The beauty of the Per Hour Planning solution is that your designated advisor will address only what it is that you want to accomplish and that you retain control over the fees that you pay. No ongoing fixed membership fees are required, you simply pay-as-you-go on an hourly basis for high quality and no-hidden-agenda personal financial advice, recommendations and professional referrals. You can also choose, if you wish, to opt for any form of ongoing portfolio management services alongside any engagement.
Like all our Per Hour clients, you will receive a complimentary copy of our Custom Spending Plan/Cash Flow Tool, Important Tax Numbers Chart, Estate Readiness Checklist and Educational Appendix that explains important personal finance concepts and strategies. And, as already mentioned, you will also be able to access those financial and legal professionals in the Anglia Advisors Professional Network, many of whom are specifically experienced and qualified in dealing with clients in your situation.
Click here to listen to a podcast Simon appeared on discussing post-divorce financial planning issues.
Important note: As a Registered Investment Advisory firm, Anglia Advisors is not permitted to give direct tax or legal advice, but is permitted to broadly describe the tax or legal landscape in which the client may be operating.