A recent study found that over 95% of women do not use a financial advisor when going through a divorce, despite having financial goals they want to achieve.
Divorce can certainly bring financial consequences, with the effects lasting years – even decades. Why are women not seeking financial advice?
Many women are not aware that a financial advisor can benefit them, even in the very beginning of the divorce process. Only 5% of women in a recent survey chose to use a financial advisor as part of their divorce team.
However, among the financial revelations from divorced women, a new study reveals that over 60% of women said they wished they would have known to use one. They believe that working with a Financial Advisor would have been extremely helpful to them and their attorneys.
A financial advisor can help you think through your lifestyle to better understand your expenses, both before and after a divorce. This is especially important for women who haven’t played an integral part in budgeting, paying the bills, buying insurance, or managing investments. Financial advisors can also help you uncover important assets that might not be on your radar. These hidden gems are crucial for making sure you get your fair share in a divorce. A few big-ticket items include the following:
The Marital Home- This is an important consideration. Not only is there often valuable equity in a house, but you and your children, if you have any, will need a place to live after the divorce. Women with children are more likely to want to stay in the home but doing so might not be possible for financial reasons. If you can’t qualify to refinance the mortgage in your name or can’t afford to buy out your spouse’s share of the equity, there may be no choice but to sell it. Online valuation tools such as Zillow and Realtor.com can give you an idea of what your home might be worth, but you should work with a professional real estate appraiser before making any decisions.
An Engagement Ring- This is not considered a marital asset because it is a gift that is received before the marriage. This means that women will keep their rings as separate property, even in divorce. An engagement ring is often very valuable, but is usually put aside post-divorce, unused, unworn, and forgotten. When it comes to an engagement ring, women don’t often consider it to be a financial asset, but it can hold high value, considering the average cost of an engagement ring in the United States is $5,900, with wedding bands averaging $1,100 for women and $510 for men. Even if you sell your rings for roughly half of their value, a $3,000, 20-year investment with a 7% annual return can grow to nearly $12,000.
Heirlooms and Antiques- When they are passed down from generation to generation through family members, they can hold significant value but aren’t typically considered marital property.
Bank Accounts, Retirement Savings, and College Savings Accounts- can be substantial financial assets. During a marriage, one in five women admits to handing over control of money to their husbands, but they must play an active role in their finances after divorce. Many women struggle to maintain the same lifestyle they had during the marriage, and a financial advisor can help you see the future more clearly to guide you when separating monetary accounts and other assets.
Divorcing Women Have Financial Goals
When it comes to financial goals that women have for the future:
- 66% hope to pay off debt
- 41% want to save for a comfortable retirement
- 38% would like to have an emergency fund
- 27% aspire to purchase a new home
- 20% are striving to create new streams of income
- 19% are hoping to build their wealth through investments
While it’s clear women who divorce have financial goals, many don’t have a clear path on how to achieve them. Financial advisors can play a significant role when dividing marital assets during the divorce process and can put you in the best position possible to help you achieve your financial goals post-divorce.
With women living longer, having a financial advisor by their side during divorce can be essential for long-term financial planning. However, according to a recent survey 72% of women who are divorced did not consider saving for retirement a top priority. This is just one reason why women who enlist the support of a qualified financial advisor might have a long-term financial advantage over those who don’t.
A little more detail on what a financial advisor can help with:
- Gathering and reviewing financial material
- Assisting you in better understanding your tax return and taxation on future assets you receive
- Walking you through your investments and portfolio risks during the divorce period
- Providing you with a better understanding of the income you will require after the divorce is finalized
- Coming up with solutions of how to meet your income needs
- Give you confidence in your financial future
A financial professional can help you overcome emotional turmoil to bring you the financial stability you deserve after divorce.
Philip Lockwood: Founder + Managing Partner
Address: 3100 Ingersoll Ave. Des Moines, IA 50312
Website: Lockwood Financial Strategies
Securities offered through Parkland Securities, LLC, member FINRA (FINRA.org) and SIPC (SIPC.org). Investment Advisory services offered through SPC, a Registered Investment Advisor. Lockwood Financial Strategies, LLC is independent of Parkland Securities, LLC and SPC
Securities offered through Parkland Securities, LLC, member FINRA/SIPC.