Big mistake in divorce

There are lots of mistakes made in getting divorced. Let me tell you about one of my very first clients.

During their marriage, Joyce's husband had done all of the investing of their money. He had chosen all of the investments, and made all of the financial decisions. At divorce time, he said, "Let's just split everything 50/50. You take this half of the investments and I'll take that half. Is that okay?" Joyce thought that sounded pretty fair so she agreed. She talked to her attorney and the attorney thought it sounded okay, too.

Joyce came to me after the divorce to do a financial plan and I saw what really happened. What no one realized - Joyce, her attorney, and the judge - was that Joyce's half of the investments included all the limited partnerships. They are known to be illiquid and high risk. She couldn't get at the money - it was all tied up for years. And the worst part was that she owed an additional $18,000 in taxes because of the way the partnerships were structured!

If Joyce had only come to me before her divorce was final so that I could look at the assets, I could have explained to her how the different assets worked and she could have made a more intelligent decision.

It is so important for people going through divorce to consult with a trained financial divorce professional. We often know more about their assets than their attorney!