Supporting Clients Through Divorce: Navigating Financial Complexity
Moderator
🚨Divorce rates are down among all cohorts save one: people over age 50. With the rise of so-called “gray divorces”, financial professionals play a vital role in helping clients transition from joint to individual financial lives. Beyond the emotional toll, divorce later in life often involves complex decisions around asset division, tax implications, and long-term sustainability. Advisors can provide valuable assistance by helping their clients approach settlement planning from a long-term point of view, not just as a transaction. Advisors can evaluate after-tax values of retirement accounts, brokerage assets, RSUs, ISOs, and retirement plan assets. A dollar-for-dollar exchange of assets, such as “you keep the house, I’ll keep my 401(k)” may not be equal once taxes are factored in. Clients should also review all beneficiary designations, avoid hasty title changes that may trigger unintended taxes, and weigh liquidity vs. lifestyle assets to prevent being asset-rich but cash-poor. Collaborative planning with legal and tax professionals, paired with a clear inventory of holdings and communication strategies, can safeguard financial stability and legacy goals during a vulnerable time.
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