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Recently Divorced

Understanding & Protecting Your Interests


Problem: Divorce Leaves Spouse in Uncharted Waters

  • Newly divorced
  • Poorly written Divorce Agreement
  • “Opportunistic” ex-spouse
  • Myriad of financial decisions and concerns

Solution: Clarified Divorce Settlement and Planned for the Future

 

Woman navigates finances after divorceAn Assortment of Challenges

Following her divorce, Ms. Neuday found herself confronted with an assortment of challenges and choices, many of which were financial in nature. Unlike many of our divorced clients Ms. Neuday had additional hurdles to contend with, namely; limited term alimony, an increasingly uncooperative ex-husband and a poorly written divorce agreement.

Divorce Agreements Are Normally Well Written

Property Settlement Agreements (PSA’s) serve as the divorcing parties’ “blueprint” for addressing topics ranging from equitable distribution, alimony and child support, to the time sharing of children. A properly drawn PSA should clearly define what constitutes earned income, also when applicable, account for stock options, restricted stock and deferred bonuses. Additionally, there should always be a detailed timing and verification process for when alimony is due for both known and future streams of income. In a few short months, Ms. Neuday would realize her Property Settlement Agreement was silent to such key language and her ex-husband would become increasingly uncooperative—a toxic combination.

Ms. Neuday’s New Beginning

Ms. Neuday met with our specially trained team of professionals and began planning for her future. We created a realistic lifestyle plan, (which accounted for the limited term of alimony). It included defined long term investment objectives and a portfolio that would best maintain the lifestyle she desired. Ms. Neuday had already opened new bank accounts and established credit in her name. Our wealth counsel team assisted with insurance questions, cash flow planning, tax projections and returns, and guidance for a new will and estate plan. The next phase would be more challenging.

Amending the Property Settlement Agreement

Working with outside lawyers and once again consulting with members of our wealth counsel team a motion was drafted to amend the Property Settlement Agreement. After numerous discussions with the ex-husband’s counsel, an acceptable resolution was achieved. Highlights included Ms. Neuday receiving a fair and timely share of all deferred compensation during the term of Alimony, including bonus payments that may be received after the term of alimony. In addition, a strict income verification process with penalties was put into place.

The Reality of Divorce

Divorce can be an emotional and physically exhausting experience. Spouses can become shameless, motivation of lawyers can be suspect and informational flow can be limited and one sided. The eventual outcome may leave the primary residential custodial parent raising children with fewer resources (whether it be family, financial, or both). The many decisions that follow divorce are vital and time sensitive. The key areas that require immediate attention are: establishing of credit, primary residence decisions, budget analysis, obtaining new insurance, estimated tax payments, investments and retirement planning.

It is critical for anyone planning or involved in a divorce to surround themselves with an advisory team they trust.

Our experienced team of advisors can help you secure your future.

 

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Please note that the case study above was selected to demonstrate the type of analysis that we could perform for our clients. This is in no way an endorsement by an actual client. Additionally the client is not endorsing our services and may or may not have a positive experience with our firm. Due to various factors, including changing market conditions and/or applicable laws, the presented material(s) may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in the presented material(s) serves as the receipt of, or as a substitute for, personalized investment advice from PWM. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.