The Team Approach to Gray Divorce

In this episode, I talk about the team approach to divorce. Attorneys specialize in the law. But divorce is about money and emotions are involved. Listen to why it makes sense to bring in other professionals to help you get through the process.

Thanks for listening! We'd be very grateful if you'd subscribe to the podcast and give us 5 stars! Please visit Transcend Retirement or Wiser Divorce Solutions. Follow Andrew on LinkedIn too!

Transcript

Announcement: Welcome to The Gray Divorce Podcast, hosted by Divorce Financial Analyst and Retirement Planning Counselor, Andrew Hatherley. Join Andrew and guest experts as they help late life divorcees build the financial and mental foundation for a meaningful future. There is life after divorce. Now onto the show.

Andrew Hatherley: Welcome to episode 27 of the Gray Divorce Podcast. Over the course of our first 26 episodes, you've heard me interview many different experts on divorce, gray divorce particularly. I thought I'd dedicate this episode to tie together some separate strands under the topic of the team approach to gray divorce. 

At the recent Divorce Financial Analysts Annual conference in Dallas, I helped put together a panel discussion which dealt with the topic.  

The title was “Which professionals you should have on your divorce team.” 

Of course, everybody's situation will be different, and different people will need to call on different experts. There are, however, a few basics from which we can build. 

So, let's define our terms.  

What do I mean by the team approach to divorce? Well, the key here is that there are many different types of professionals working in the divorce world. The obvious place to start is the family law attorney.  

Let’s imagine we were to play some version of Family Feud and I was to play the role of Richard Dawson (or Steve Harvey for you youngsters out there). So, we are in the Fast Money Round and I ask the contestants to name a professional in divorce. 

I’m pretty sure lawyer would be the number one answer. 

What do you think would be the second most popular answer? 

I would guess it would probably be a marriage or family therapist or perhaps a financial advisor or CPA.  

Certainly, the legal professional, a financial professional and a mental health professional seem to be pretty obvious choices. 

But, as we'll discuss here today, there are other important professionals in the divorce world: these might include, but not be limited to: divorce lending professionals, real estate agents specializing in divorce and divorce coaches specializing in guiding people through the divorce process. And let's not forget a different type of attorney, the estate planning attorney, who can play an important role for gray divorcees with respect to beneficiary and legacy issues. 

I'd like to go through each of these divorce team members in a little bit more detail but first let's tackle a few fundamental questions. Most importantly, why would you want to have a divorce team? Is it necessary?  

And, the $64,000 question how much is this going to cost anyway? 

So why would you want to have a divorce team? Well, I would start to answer that question by saying that your divorce is probably the most important financial transaction of your life. And if it's happening in mid-to-late life after the age of 50 or even in your 60s or 70s, the stakes are extraordinarily high. You have less time to recover from any mistakes that are made in the divorce. That's why it's so very important to be educated about divorce before you get into the process or at least before you sign the divorce decree. And the way to get educated about divorce is to do your research, which should involve speaking to experts on the various topics that come up in divorce.  

Don't rely on your sister or your drinking buddy for expertise on how spousal support or growth on separate property is treated in your states divorce statutes. 

You might ask, “Isn't it enough to hire a divorce attorney? Can’t they take care of everything?  

Well, they could. And often they do. 

But consider this: family law attorneys are experts in family law. They are not experts in financial planning or retirement planning, taxes, mortgage lending, emotional and psychological counselling, or real estate.  

If you’re going through divorce, you need to be properly educated and to make the best decisions that'll set you up with a good financial and emotional foundation for the rest of your life. You need to speak to experts in the fields where you need help. 

You know, I often say to people who come to my divorce workshops that every conference room table in every divorce attorney's office in the USA has a box of tissues placed in the middle of it.  

Because people are often very emotional going through divorce.  

Particularly people who are emerging from long marriages and are dealing with a huge shock to the lifestyle with which they’ve become familiar. The problem is attorneys aren't trained in emotional counseling. And if you're paying your attorney $400-$500 an hour you want to maximize your time by getting their help in the area in which they are the experts. 

As a CDFA or certified divorce financial analyst, I work with attorneys to do some of the specialized financial work in divorce. While I wouldn't think about practicing law, many attorneys really shouldn't think about practicing finance or financial planning. I've seen enough marital settlement agreements to know that finances aren't an attorney’s area of expertise. And the smart attorneys know this. They focus on their strengths. As we all should. 

The Divorce Attorney 

So, let's focus on attorneys a little bit. 

As I said before, divorce is a legal process. The funny thing is you don't legally need to have an attorney to get divorced. But that most certainly is not something I would recommend. Just listen to episode 26 of the gray divorce podcast where I spoke with family law attorney Philip Spradling about the dangers of do-it-yourself divorce. Even if you and your spouse agree about how to divide the marital estate, I strongly recommend having an attorney draw up, review and file the documents. You don't want to mess up and have to revisit the divorce decree in the future once you've moved on with your life. 

It's important to research attorneys before you decide to work with one. They're not all the same. Certainly, there are differences with respect to experience, competence, and cost. And some attorneys specialize. For instance, some attorneys may limit their practices to a more settlement friendly approach and try to avoid litigation. They may specialize in mediation or collaborative divorce, or a new process known as amicable divorce. Other attorneys may choose any dispute resolution model including a much more litigious, aggressive approach. 

Of course, all of us have heard about the stereotype of the highly litigious attorneys, sometimes referred to as a “shark attorney.” It's funny, I know an attorney in Southern California who's much more settlement minded. He does a lot of collaborative divorce, and he refers to himself as a “dolphin” attorney. 

Some attorneys may focus more on issues involving children in divorce. Typically, this isn't a concern for older divorcees whose children have likely flown the nest. 

Bottom line, when looking for an attorney for your divorce team, know what type of attorney you're looking for and interview them. Also, get referrals from other potential team members. People come to me, as a financial advisor specializing in divorce, asking for referrals for attorneys. Depending on the person’s circumstances I can usually direct them to a couple of attorneys that I think would meet their needs. 

The Financial Professional 

While child custody issues typically aren't relevant to the mid to late life divorcee, the real issue is the financial settlement. It's that the settlement puts you on a solid foundation going forward. This is particularly important for women in gray divorce, as they tend to experience a more negative economic result from divorce.  

This is where we see the importance of hiring a financial professional as part of the divorce team. Many of my clients are people, usually women, in their 50s or 60s, who want help in understanding the long-term financial ramifications of the settlement agreement. This can include the impact of taxes and inflation on the division of assets and the generation of income going forward. 

It’s worth noting that many of my clients have worked with a family financial advisor for years. More likely than not, that financial advisor was hired by the husband. This wouldn't be the best person for the wife to seek financial counsel from in divorce. They may be biased, and they don't have experience working in divorce. 

It’s important to find a financial professional who is looking out for your best interests and has experience working with divorce financial planning.  

Listeners of the podcast know that I am a Certified Divorce Financial Analyst. I have the CDFA credential. I would caution listeners that the CDFA credential alone, while certainly a good thing, doesn't qualify a financial advisor in and of itself. There is quite a steep learning curve in the world of divorce. You might consider asking potential advisors how many divorce cases they've worked on? What type of clients do they typically work with? And what type of attorneys do they typically work with? 

Just like with attorneys, not every divorce financial advisor is going to be right for you. In a divorce proceeding particularly, with the stakes so high, you want to work with someone you're comfortable with.  

You want to be comfortable with all your divorce team members! 

Of course, CDFA's aren't the only credentialed advisers dealing with financial matters. CPAs specialize in taxation and may be helpful in advising on more complicated tax matters.  

Sometimes your attorney will recommend bringing in a business valuation specialist if there is a business asset that needs to be valued with the property settlement. 

Getting back to the issue of cost:  

One attorney I work with encourages her clients to bring me in onto the divorce team as a financial professional, recognizing that it's not an area that she particularly wants to deal with and recognizing that is not her expertise. Essentially, she asks the client, isn't it far more efficient to have a financial professional working for you at, let's say $225 an hour than to have me, the attorney, do it for $450 an hour? If you think about it, you're actually getting two for less than the price of one when you bring in specialists who charge less. 

Mental Health Professionals and Divorce Coaches 

Let's talk a minute about mental health professionals and divorce coaches. 

I can't underestimate the importance of the mental health professional on your divorce team. For older people divorce can be, as author Bruce Feiler calls it, a “lifequake,” a complete upending of relationships not only with your soon to be ex-spouse but also children, grandchildren, extended family and friends.  

And If divorce is likely the largest financial transaction in your life, you want to try and make these financial decisions with as a level a head as possible.  You should seek the guidance and support of professionals who can help you not only through the process but in the rebuilding and healing stages after divorce.  

While divorce coaches aren't necessarily mental health professionals, they can play an important part in helping make the divorce process less overwhelming and scary.  They can help you focus and take on an active role in the process, which is likely to help emotionally and financially going forward. 

As with attorneys and financial professionals, you should do your research to find a mental health professional or divorce coach with whom you can establish a good rapport. Ask your attorney or financial professional for recommendations and visit websites like Psychology Today.com for mental health professionals and the Certified Divorce Coach website for divorce coaches. 

Divorce Lending Professional and Realtors 

Two other team members are the divorce lending professional and the realtor. 

Gray divorcees are often dealing with special real estate situations. 

We often see in late life divorce that the marital home has more equity.  Indeed, in many cases the mortgage may be completely paid off.  

In many cases one party, typically the female spouse, may not have a career because she's dedicated her life to raising the children and taking care of the home. If the home is being sold, how's she going to qualify for a mortgage? 

Often, women in this situation will want to stay in the home because they may not meet a lender’s income guidelines to purchase a new home.  

But there may be some creative solutions. 

When real estate financing issues are a concern, I suggest bringing in a mortgage lending specialist who has experience helping divorcing couples. It's really a no brainer to bring a good mortgage specialist into the divorce process as early as possible. I would recommend a Certified Divorce Lending Professional or CDLP. They are trained to work with divorcing couples financing needs and don’t charge consulting fees. And they understand the language of the lending industry. This is important because the language of marital settlement agreement can be at odds to the language a mortgage lender may need to see to qualify you for a loan. A divorce lending specialist can work with the divorce attorney to make sure that the language in the agreement meets the needs of future financing. 

When the marital home is being sold you can benefit from having a real estate expert on your team to help facilitate the sale of your real property. There are real estate professionals trained in divorce. They hold the designation certified divorce real estate expert or CDRE. Once again like the divorce lending professional, this is an expert resource that comes with no added cost. The benefit is they have experience with family law cases, and they are a neutral third party trained in dealing with situations where the sellers might be going through a contentious divorce. 

Estate Planning Attorneys 

Let’s take a brief look at estate planning attorneys. 

While family law attorneys obviously focus on the division of assets between parties while they're still alive, consideration must be given to what might happen to those assets upon the party's deaths, either during or after the divorce process. You can understand that this issue pops up more with couples divorcing in their 60s and 70s and 80s than it does with couples divorcing in their 20s and 30s. 

So, if you've got a trust drawn up, speak to your estate planning attorney about having that updated. The same with any powers of attorney or medical health directives. And of course, update your beneficiaries at the plan or custodian where those assets are held. 

Conclusion 

Well, I hope you found this overview of the benefits of building a divorce team helpful. The added cost may be much less than you think, and the benefits can be significant. Not only in getting through your divorce with less financial and personal stress, but in helping you build the financial and emotional foundation for the next chapter in your life. 

Until next time. Bye for now. 

Announcement: Thanks so much for tuning into this episode of The Gray Divorce Podcast. To learn more or get in  contact with your host, you can visit Andrew's website at transcendretirement.net. Also, please feel free to rate, subscribe, and leave a review wherever you listen to your podcasts.

That helps others find the show, and we greatly appreciate it. Thanks again for listening, and we'll catch you in the next episode.

Andrew Hatherley: Information provided is educational only and should not be construed as legal or tax advice. Each situation is unique and should be discussed with your tax or legal advisor prior to implementation. Andrew Hatherley is not an attorney and does not provide legal advice. Information provided is financial in nature.

Advisory services offered through Hatherley Capital Management LLC. Divorce Financial Analysis Services offered through Wiser Divorce Solutions, an affiliated company.