How can advisors help their clients plan for divorce?

Offering perspective in a difficult moment

Even if clients don’t have a marriage contract or any kind of documents planning for their possible divorce, Britton says that a financial plan can also help them manage in that moment. Those without a financial plan aren’t able to even reckon with questions around how the divorce affects them financially. If they have a plan already, it can be adapted to reflect new realities and shifting goals.

The clarity and perspective that a financial plan can provide is extremely useful for clients going through a divorce, Britton says. Divorce is fraught with emotion and conflict and can easily result in someone getting tunnel visioned around a single bone of contention. A financial plan can show them if the house they’re so fixated on keeping is even affordable to maintain under the current conditions. The financial plan can be instructive on where to compromise and show how the legal fees associated with a protracted divorce process can be devastating for the divorcing couple.

“Tunnel vision in any legal dispute, but divorce especially, is bad. It’s like the fog of war,” Britton says. “If you have professionals around you who can give you objective advice that is going to just give you such a better outcome.”

Proactive planning before divorce

For all the ways a couple might not want to engage with a tricky subject like divorce, Britton insists that there can be significant value in making preparations. He notes, anecdotally, that he’s seen more young clients open to the idea of marriage contracts and domestic agreements. Those younger generations are also more open to keeping finances more separated and independent, even as they work with advisors to build plans that serve shared and common goals. Britton says that these agreements can serve as a roadmap for those couples, even if they never need it.

While some may be open to the idea of a marriage contract, others are still unwilling to engage on the subject, thinking that the marriage will last. Marriage contracts can also be expensive to draw up, as well, as they require hiring two lawyers. Britton says that advisors can play a role encouraging young couples to build some kind of plan, noting that while a contract can be expensive up front, it’s far cheaper than the cost of litigating a divorce without any kind of agreement.