What documents do I need to bring to a consultation meeting with a financial advisor if I am in the process of getting divorced and what should I expect to get out of a consultation?
My husband is leaving me after 25 years and I am going through a very difficult time. I am 64 years old and do not work/have a job. I have 3 kids - 2 are seniors in college (21 years old) and 1 is graduated and is financially independent (25 years old). I live in the state of New York. I am beginning the search for a financial advisor to ensure that I am getting the best settlement. Before I begin my search, I need to gather all the materials I need for a consultation meeting. Please advise me as to what documents/information I should get together and what I should expect out of a consultation with a financial advisor. I am looking for an advisor that will be able to provide me financial planning and wealth management support during the settlement process and post-divorce as well.
I know from personal experience the issues that you are facing and it was my own divorce which led me to focus on divorce issues in both my planning and divorce practices. I do hope that your divorce is cordial and does not get nasty. Sometimes in the process, it is helpful if you have someone in the mental health arena to help with the emotional anguish that often accompanies the end of a marriage.
What do I ask clients to bring to an initial consult? Nothing - just themselves and to tell me what they are going through and what do they want to accomplish. You will also be asked if there are any nuptial documents in place. If it is a good fit, at subsequent meetings you will be asked for copies of tax returns and lists of assets and liabilities. Much of what will be given to attorneys for the discovery will also be what I require. You will be expected to provide a budget - what do you need to live on. The copier machine will become your friend - you will need 3 years of tax returns, at least 6 months of brokerage statements, bank statements. You will need copies of your spouse's retirement plan and work related benefits.
The "best" settlement is going to be determined by your lawyer, his lawyer and the judge. What I can do, is make sure that you understand the impact of the settlement and how it will impact you. The advisor should be the one to work with you and your lawyer and if needed, handle much of the non-legal paperwork. If you develop a nice working relationship with the advisor then they can continue post-divorce.
Again, the initial consult is really just a getting to know each other meeting and there is no need to have much documentation. Always remember though, once engaged, you need to be 100 percent up-front with everything.
I am sorry for what you are going through, but life does go on - stay strong and healthy.
I am sorry to hear you are getting divorced. I have helped many people in your situation and it is very important to make sure you are working with a trusted fiduciary financial planner. For anyone in their 60's is important to have a financial plan to help guide you for years to come.
A first meeting should really be about your and what you are hoping to accomplish and what you need to get by. Normally a financial planner will take some time to craft a road map to help you have a path to follow to stay on track financially, and to help you adjust to the new realities of your new life.
Here is a generic list of things I ask people to bring to a first meeting.
To help me do the best possible evaluation of how I might help and to make sure we are thorough in our review of your current situation, if would be good for you to bring with you the following to our meeting.
-Retirement information: IRA’s , 401k’s or other plan statements such as pensions etc.
-Other saving or investment statements, from banks or investment companies.
-A copy of your monthly expenses.
-Statements or policies for any life or disability insurance.
-Idea of you some of your financial goals such as buying a home, or retirement.
If you have any questions, please do not hesitate in calling or e-mailing me. I look forward to our appointment and discussing you ambitions.
Feel free to reach out if you need any further guidance.
Live for Today, Plan for Tomorrow.
DAVID RAE, CFP®, AIF® is a Los Angeles-based retirement planner with DRM Wealth Management. He has been helping friends of the LGBT community reach their financial goals for over a decade. He is a regular contributor to the Advocate Magazine Investopedia and Huffington Post as well as the author of the Financial Planner Los Angeles Blog. Follow him on Facebook, or via his website www.davidraefp.com
I am sorry to hear that you are having a tough time right now. Divorces can be very emotional, and this is the time to try to remain clear-headed and calm. Treat the divorce like a business deal, stand your ground, and work for your best interests. 90% of all women will be solely responsible for their finances at some point in their lives! Having a competent divorce lawyer is very important. Joint assets, such as homes, savings accounts and pensions, should be divided between you and your ex. A Qualified Domestic Relations Order (QDRO) should be drawn up by your lawyer before the divorce is finalized.
The short answer to what documents to bring to a consultation is: as much info as you have on your finances (individual and joint). Brokerage statements, bank statements, last year's tax returns, info on property held in common (primary residence, rentals, etc), a thorough accounting of income and expenses. Do you have children, and will there be child support? Since you were married longer than 10 years, you are eligible for your ex's Social Security. Are you on your ex's health insurance plan or do you have your own? If on his, try to schedule all of your medical and dental appointments before you will lose this insurance. You will also have the option of continuing that insurance via COBRA for 36 months (generally). This is the time to get organized and stand on your own. Set up individual accounts in your name only, if these do not exist. Deposit your paycheck into your new individual account, not into a joint account. Make the financial separation as soon as possible.
Above all, know that although your divorce may be something you didn't see coming and think you can't live through, you CAN, and will. Hardships bring opportunities and the potential for you to grow and find new talents. Many women pay little attention to their finances prior to becoming divorced or widowed. Any financial advisor worth their salt should educate you on the basics of finance and help you draw up a plan to make you comfortable with your financial future. I always think of myself as part of a professional team (along with a lawyer and accountant) that works for the best interests of my clients.
The following is a list of the documents I would generally require from any new client;
A review of your financial documents is a critical part of understanding your present financial situation. This review will enable us to fully evaluate the appropriateness of your current plan, identify weaknesses, and make relevant observations and recommendations.
Personal Financial Statement
Marital Property Agreements
Power of Attorney
Health Care Power of Attorney
Life Insurance Policies & Most Recent Policy Statement
Disability Insurance Policies
Income Tax Returns for Three Years
Gift Tax Returns
Most Recent Profit Sharing, 401(k), or Pension Plan Statement
Investment Statements (Brokerage, Mutual Funds, IRAs, etc.)
Annuity Contracts and Most Recent Account Statements
Dissolution of Marriage
During the initial consultation the financial advisor should be able to explain their educational background and professional designations as they each pertain to the financial planning and wealth management services they provide. They should articulate how they specifically would assist you with respect to your financial planning objectives. They should also explain all fees and expenses which would be charged associated with your engagement and ongoing relationship. Finally, they should inform you as to weather or not they will be acting in a fiduciary or non-fiduciary capacity as your financial advisor.
Most of these items can be discovered within their ADV Part 1 and Part 2 which all financial advisors are required to present to their potential clients. Please see https://www.sec.gov/fast-answers/answersformadvhtm.html for additional information. You may also obtain invaluable information by visiting https://www.cfp.net/ and https://www.finra.org/.
Unless your financial advisor is also an attorney, which is highly unlikely but possible, the best you can expect is to find out how much your various assets and your husband's assets are worth. You can also decide which assets you would like to keep based upon your tax situation and your expected future career. In general, the best assets to own are those with the lowest tax liabilities; owning a 401(k) or traditional IRA is less favorable since you will eventually have to pay about one third of those holdings in taxes. On the other hand, a Roth IRA is very valuable because it is tax-free and tax-sheltered for the rest of your life. So you should prepare to let your husband have the less-favorably-taxed assets if you have a choice. Owning regular assets with long-term capital gains is also favorable; those with short-term gains are less ideal. Assets with losses outside of retirement accounts are actually good since that can reduce your future tax burden. WIthin a retirement account there is no advantage to an asset which has lost value, except for being able to convert it from a non-Roth retirement account to a Roth IRA so you pay taxes at the current depressed valuation.
Meanwhile, once you know which assets you have and which are best for the future, you need an attorney who will get you the best possible settlement.