Divorce is Complicated, Especially for the Rich. 7 Smart Tips from Money Pros.

Monica Ann McCarthy |

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Divorce Is Complicated, Especially for the Rich. 7 Smart Tips From Money Pros.

Barron's logo

By Cheryl Winokur Munk

Sept. 22, 2023

Divorce is never pretty, but it can be even uglier—and prolonged—when significant assets are at stake.


Illustration by Barron's; Dreamstime (2)

The average time to get a divorce is a year, according to a 2019 study by Martindale-Nolo Research. But 13% of respondents had to wait over two years before their divorce was final, the report found. And that’s conservative by some estimates. Some advisors say they have seen divorces drag on for five to eight years or more when assets are particularly complex or couples can’t agree on child custody or other particulars.

“For anything that has to do with dollars and cents, the more wealth there is, the more complicated everything is,” says Lauren Cosulich, a partner with Summit Trail Advisors in Boston.

Here are seven tips for getting through complicated divorces:

Set realistic expectations. Even when divorcing spouses agree on most things, there can still be mitigating factors, such as court backups, to contend with. That’s why it can be helpful to plan for the worst-case scenario, says Sara Stanich, a certified financial planner and Certified Divorce Financial Analyst at Cultivating Wealth in Montauk, N.Y.

Complicating matters is the fact that joint assets may be unavailable to use while negotiations are under way, which is where current income becomes critical. “Net worth is practically useless because you can’t tap anything,” says Peter Yerger, a certified financial planner with Brightside Benefit, a financial wellness software provider in Chandler, Ariz. “It’s a cash-flow story.”

Planning ahead includes making sure clients—even wealthy ones—can support themselves financially while divorce details are being ironed out. Advisors should help them determine their current income and expenses and how these figures could change over the next few years. They might need to get a job, for example, or take a higher-paying role. They might also need credit cards in their own name. Advisors should also ask about independent sources of income, outside of marital assets, they may have available to help cover their expenses. Living accommodations are another topic to broach, Stanich says. Will they need to rent a place to live, and, if so, do they need a cosigner?

In one extreme case, a client went to live in a homeless shelter for eight months to conserve funds, while the details of her divorce were being hammered out, Yerger says. The divorce took nearly two years to finalize, but the woman ended up with a nearly equal split of the $1.5 million that was initially in dispute, he says.

Clients should also consider whether they have a buffer for new or surprise expenses, Stanich says, offering the example of a client in her late 50s whose soon-to-be-ex unexpectedly switched to a high-deductible plan, leaving the wife, who was on his plan, with substantial unexpected healthcare expenses.

There can be other costs during a long divorce that couples should factor into their budget. These can include unpaid time-off, daycare costs, and lawyers’ fees, Yerger says. 

An advisor can be the client’s quarterback. Annamaria Vitelli, head of Pittsburgh-based PNC Private Bank Hawthorn, the bank’s ultra-high-net-worth division, often works with stay-at-home moms who aren’t as financially savvy as their husbands. She helps these women understand the couple’s overall asset picture to help determine what they should be asking for in a settlement.

Armed with information about valuation and potential tax repercussions, clients can make more informed decisions about what’s really important to them in a divorce settlement, especially when there are more complicated and sometimes difficult-to-value assets involved. These can include a family business, private-equity investments, properties, and collections of art, rare coins, or race horses, Vitelli says. Advisors can also act as a sounding board, helping clients determine what’s really important to them—the value of the beach house or the memories. “Advisors can’t be afraid to touch that third rail,” she says.” 

Advisors may also find themselves educating one spouse about financial matters they never paid attention to before, such as private equity distributions or capital calls, says Lizzie Sheehan, family office strategist at St. Louis-based Moneta. “You want everyone to be comfortable and understand their financial picture,” she says.

Facilitate communication. Advisors can also help facilitate conversations with attorneys, who may not be as familiar with hard-to-value assets and the tax ramifications, says Daniela Pedley, a partner in the San Francisco office of Summit Trail Advisors. “The more complicated the assets are, the more they need help simplifying that, as does the client.”

Assets may also have to be revalued multiple times, depending on how long divorce proceedings drag on, which makes things more complicated and expensive for everyone, Stanich says.

Find a listening ear and emotional support. It can be exhausting for clients going through a divorce, especially when things drag out, Pedley says. She often gives pep talks to disheartened clients, telling them not to give up. “Don’t just agree to give him everything because you are at the end of your tether,” she tells them. 

Be on the lookout for nasty tricks. Sometimes one spouse decides to play hardball—and it can throw the other spouse for a loop if no one’s looking out for his or her interests. 

Jere Doyle, senior vice president and estate planning strategist at BNY Mellon Wealth Management in Boston, recalls a situation where a husband tried to empty the couple’s joint account. The firm alerted the wife and the husband decided against taking the money, but Doyle says it should serve as a cautionary tale to couples with joint accounts who are splitting up. “Taking money out of accounts is something that happens quite often,” he says.

Encourage clients to change their tax-filing status. This can be especially important if one spouse could potentially hide assets in a business, Doyle says. If he or she doesn’t report income properly, the other spouse could be on the hook if they are filing jointly. Divorcing spouses can protect their interests by filing taxes separately, he says. 

Don’t underestimate your worth. Cosulich frequently works with divorcing women whose marital assets are held at another investment firm. Asking the client or the divorce attorney for a reasonable monthly retainer can help compensate an advisor, who normally charges based on assets under management, for what often amounts to considerable work over several years. You might spend three or more years advising a client and if there aren’t assets to manage before the divorce is settled, you won’t be getting paid for your work, she says. “They need to be paying you for your services.”

This Barron's article was legally licensed by AdvisorStream.

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Monica McCarthy, CFA®, CDFA®, CEPA®, CPWA® profile photo

Monica McCarthy, CFA®, CDFA®, CPWA®, CEPA®

Chrissy Sullivan, CFP®, CDFA®, CTFA, CEPA®