13 Jan Lesson Learned: After 25 Years of Marriage, He Leaves Me!
One of the jobs of a financial advisor is to plan for the unexpected. I’ve had numerous clients contact me and say, “I can’t believe my husband is planning on leaving me.” Or “My husband is having an affair and filing for divorce. What do I do now?”
How do you plan for one of the worst things in the world? There’s no insurance that you can buy in case you face divorce. When a marriage ends, many changes take place, including where you live and dealing with less income, not to mention the emotional toll it takes on you.
This is one of the most difficult stories for me to share, but it’s all true.
The Problem
I have a client whose husband decided to divorce her after 25 years of marriage. He was a well-to-do physician, and she was a stay-at-home mom. They had everything on the outside—the nice car, the beautiful home, the private education for their 5 children— but something was very wrong. Even though her husband was verbally and physically abusive toward her, she wanted to keep the family together because of the children. It was a very sad situation.
The Solution
After the divorce, she hired me to help pick up the financial pieces. As a homemaker, she didn’t have a clue regarding her financial assets, and as a part of the divorce settlement, she received a large portion of her ex-husband’s assets. For over a year, she and I met every Friday in my office so I could help her understand the basics of money management. What’s the difference between a stock and bond? What’s a P/E ratio? How does the market perform when interest rates rise or fall?
It was going pretty well, until her ex-husband started coming to the meetings with her. (This was a little odd, wouldn’t you agree?) He started to contradict my recommendations because he wanted her to manage the accounts like he originally set them up.
After a couple of months of meeting with the three of us, I realized this was not the best use of my time. She began to question my advice because her ex-husband caused her to doubt my strategy. (I wanted to reduce her risk.) But since she had no experience in the market, she didn’t know what to do or who to believe. She was scared to lose the $1.5 million that she received from her ex-husband (which is why I recommended that she reduce her risk). Additionally, I generally advise clients to educate themselves before taking on more risk. Her emotional risk was quite high because she didn’t have a good understanding of how the market works.
The Result
As a financial planner, I try to develop a relationship with my clients in order to best understand their needs and goals. Unfortunately, even though I really wanted to help this client, the divorce really complicated things for her. I tried to help her understand a very important concept: When the money was transferred to her name, she needed to manage the money based on her circumstances and goals, not his.
