“I’ve never heard of anyone doing that before” is the most common reaction I get when I tell people what I do. I am a divorce specialist financial planner. There are less than 40 of us, accredited by the family justice organisation Resolution, to provide this advice. But what does it actually mean in practice?
Not the money person
Marriages, or civil partnerships, are teams and, in teams, each person plays to their strengths. As a result, there will be things that each person does because they are best placed to do those jobs, or you prefer them. In my own marriage, I preferred cleaning the house to gardening and so I cleaned the house and my ex-husband looked after the garden. In the case of the money and finances, it is generally the case that one person will take responsibility for researching and organising the bank accounts, insurances, mortgage, etc.
When a couple divorces, or dissolves their civil partnership, the person who has not been looking after the finances has an additional layer of fear, because they feel they don’t understand the money. They don’t feel comfortable in taking responsibility for this area of their life. They also feel that their ex may bamboozle them when it comes to agreeing a financial settlement. This is the point at which a large proportion of my clients contact me.
The dreaded form E
When you are working with a divorce professional, whether that is a lawyer or mediator, almost the first thing they will ask for is your “financial disclosure”, which is often done using a legal document called the form E, which is 27 pages long and can send many people into a spin from the off.
I work with my clients to collect the information together needed to complete the form. The figures we enter on the form need to be supported by evidence. For example, the bank balance on the form will require a corresponding bank statement.
The part that people often find the hardest is the expenditure section. There is also the issue of “the man down the pub”, who may tell you to exaggerate your expenditure so that you get a higher settlement. In practice, this tactic is likely to cost you more in mediation and legal fees as if your expenditure hugely exceeds your income, it will be clear that this is not an accurate assessment of your expenditure. We support our clients in putting together a realistic current and future expenditure forecast.
Lawyers are not pension experts in general, nor should they be expected to be. However, pensions are often the second biggest, if not the biggest, asset of a marriage and should not be ignored when negotiating a financial settlement. The next stage in our support of clients is to help them to understand their own pensions, what their ex has and whether they need the input of an actuary on all the pensions to work out how best to either divide them, or use a separate lump sum amount to compensate for the difference.
Once the actuarial report is received, we support our clients and their lawyers in interpreting the information. This can help with working out an appropriate offer to make to the other side, or in reviewing an offer that they make.
What does that mean for my life?
When your lawyer proposes an offer for financial settlement to make to your ex, or you receive one from them, it is important that you understand what it actually means for you and your future. We use professional modelling software to help to put the offer into context. What will that mean they need to earn, does it impact when they will be able to retire, how much will they have to live on in retirement. These are important questions, and the answers could impact whether the offer works for our client or not. It might be that we can propose a small restructure in the settlement to make the offer acceptable.
It is important to remember that compromise should be expected on both sides. It is unlikely that either will receive all that they wanted. It is commonly said that if either is happy with the outcome, it was probably the wrong one!
The New Chapter
Following the settlement being agreed and sealed by the court, there may be a lump sum order or pension sharing order to implement. We often continue to work with our now divorced clients for many years post-divorce, helping them to design the next chapter of their life and work with them to live the life they desire. In this stage, I often see my clients change and grow, as if they learn to fly.
Divorce has a huge impact on most who go through it. Those who have clarity about their financial future can move on afterwards will peace of mind about what the future holds for them.
Tamsin is a Chartered Financial Planner with over 20 years experience. She works with couples and individuals who are at the end of a relationship and want agree how to divide their assets FAIRLY without a fight.
You can contact Tamsin at firstname.lastname@example.org or arrange a free initial meeting using https://calendly.com/tamsin-caine/15min. She is also part of the team running Facebook group Separation, Divorce and Dissolution UK
Tamsin Caine MSc., FPFS
Chartered Financial Planner
Smart Divorce Ltd
P.S. I am the co-author of “My Divorce Handbook – It’s What You Do Next That Counts”, written by divorce specialists and lawyers writing about their area of expertise to help walk you through the divorce process. You can buy it by scanning the QR code…