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Divorce and Finances: Making an Easier Transition

The divorce process is not just about separating assets, determining support and keeping the emotions at bay. It’s about working through an incredibly life-transforming and emotional experience while also beginning to paint a new canvas for your life.

A wise woman once said, “Divorce is like a rebirth. But the labor is very long.” 

With close to a 50% divorce rate in the U.S., millions of people will face this unfortunate and daunting process. In times of challenge, maintaining the proper perspective can feel life-saving. Thinking about your divorce process as a three-phase water metaphor may be helpful. Expect these stages and remind yourself that this too shall pass—for eventually, with time, a new stage will appear. (For related reading, see: Crowdfunding Your Divorce.)

Waterfall: Initial Loss and Realization of Change

You are falling, splashing into a world you never wanted to be in. Everything familiar to you—your marriage, home, family structure, social circle, perhaps even financial security—has all seemingly been pulled out from under you. You feel like you are lost, drowning in sadness, and overwhelmed. You have no idea what to do, where to go, or how you’ll even get through the day.

  • Financial. Both parties try to get a grasp of what their income, asset and liability picture looks like. In the past, one spouse probably handled this area so there is a need for a fast learning curve for the less aware spouse.
  • Legal. A legal process is considered: mediation, a collaborative law process or separate attorneys who vow to fight to the finish.  Professionals (attorneys, forensic accountants, mediators) are hired.
  • Coaching/Counseling. Coaching, personal fitness and mental health professionals often round out the divorce team to provide emotional and communication support.

Rapids: Rough Seas but an End Is in Sight

After some time, you get settled into this process. You and your former spouse have accepted this is the path you are on and you focus your energy on the demands of the process. You are still navigating strong emotional boulders, but new routines have formed and you begin to see that you are going to survive. In your work with your advisors, you start to assess the reality of your situation and what options are available to you. Questions such as: “Will I be able to stay in the same house? Will I have to go back to work? What amount of lifestyle can I afford?” are addressed. Based on these variables, you prioritize and begin to develop a working roadmap for the future.

  • Financial. A working financial plan is created based on a number of assumptions. As negotiated factors become known, it is updated, and like a sculpture from a block of marble, you begin to see what your future financial lifestyle will look like.
  • Legal. Discovery is now behind you and this is where heavy negotiating is involved. While your attorney or mediator may be driving the process, it is critical that you stay informed and guide their direction so their efforts (and the associated costs) remain focused on the issues that are most important to you.
  • Coaching. Exercises in letting go of the past and forming new communication patterns with your former spouse prove productive. This phase is about confronting reality (about yourself, your ex, your finances) to be able to make good decisions in the future. (For related reading, see: How to Manage Your Finances Through a Divorce.)

Canoe: Peace and Acceptance

The turbulent waters have calmed and you now can see the end of this process in sight. You are beginning to enjoy life again. You and your former spouse have completed a number of challenging discussions and many decisions have been made. This has hopefully resulted in reduced tension and more acceptance of this post-marriage phase with less blame and negative energy toward each other. This allows you to focus more productively on solutions and resolution.

You have your head above water and are able to breathe again, and you have a newfound appreciation for the “scenery” in your life—the gifts of health, family, friends, peace, personal growth and romance.

  • Financial. Your personal plan is solidified; you now know your direction and can focus your actions based on known factors. Family routines become familiar and accepted.
  • Legal. Final negotiations are documented, and the marital settlement agreement is drafted and signed. Assets and liabilities are split and support payment structures are made.
  • Coaching. Your visits with your counselor may be less frequent as you have moved out of a crisis mode and into a new life-maintenance mode.

By keeping a trusting perspective that things will get better, by surrounding yourself with a strong team of professionals and friends and by accepting each phase as being part of a normal process everyone in a divorce must go through, you will get through to brighter days with minimal pain and worry. (For related reading, see: How to Protect Your Pension in Divorce.)


Mission Wealth is a Registered Investment Adviser. This document is solely for informational purposes, no investments are recommended. Advisory services are only offered to clients or prospective clients where Mission Wealth and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Mission Wealth unless a client service agreement is in place.