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Getting a Divorce? Avoid Making These Five Most Common and Costly Mistakes

Donna Kline, MBA, CDFA®, CDC®

06/14/2021

Planning a family’s financial future during a divorce should consider a variety of factors, including ages, incomes, assets, and expenses. As a Certified Divorce Financial Analyst, I help people resolve the financial matters associated with divorce.

No two divorces are alike. A settlement might need to include provisions for children’s education or income support. Assets may be illiquid, such as real estate, or not fully vested, such as company profit sharing plans or stock options, and therefore not readily available for division. I help individuals or couples craft a financial strategy that is both equitable and practical.

As a Certified Divorce Coach (CDC), I help people avoid making the “mindset” mistakes that so often accompany a divorce. It is not always easy to get people to think practically when they are struggling to deal with a divorce emotionally. I’ve learned to ask questions that help them stay focused on the financial issues of their case, not to fall victim to fear of what has been lost and what could continue to go wrong.

Following are five of the most common mindset mistakes I’ve encountered over my years as a CDC1:

  1. Throwing in the towel. Divorce, particularly a litigated divorce, can be exhausting: court hearings, mean-spirited letters flying back and forth, long periods of time with little or no activity or sense of direction. It’s enough to make a person want to quit, give in, walk away. Sometimes the fear of the process itself makes a person want to walk away before they even get started. The problem with throwing in the towel is that you could be walking away from what is rightfully yours. You need to take the time to think through your financial decisions, or you could be returning to court to fight over details you didn’t address the first time around.
  2. Taking a “my way or the highway” stance. People can take firm positions in divorce, such as “I am not leaving this house” or “I am not giving up any part of my pension.” Position-based thinking keeps people embattled in court; it exaggerates the breakdown in communication that led to the divorce. Remember that divorcing parents will need to communicate after the divorce is final. In fact, with separated households, communication becomes even more important. I serve as a “thinking partner” on these types of issues. What is the need behind the position? What is it that makes that issue or asset so important to you?
  3. Betting the farm on another relationship. Sometimes, a new love is in the picture. This new love may provide a sense of confidence and comfort. While the feelings may be real, it is important not to let them lure you into complacency when it comes to decisions about your future finances or time with your children. Everyone appreciates emotional support during a divorce, but you must approach the details of the settlement with practicality, as if you will be living on your own.
  4. Allowing others to make your decisions. This is what litigation is, allowing your lawyer to tell you what you should fight for or have a judge declare what is best for your family. But only you can decide what is best for you and your family, what is practical and equitable, what is best for your children. Of course you need an advocate in the divorce process, but if you are able to think through the details of what is important to you and your family, you can also be your advocate.
  5. Not getting help from the right people. Friends are great, but friends’ divorce advice is often disastrous. You need to engage people who are trained to give you advice: lawyers for legal advice, CDFAs for financial advice, a counselor to help you sort out the emotions behind the loss of your family structure, and a CDC to help you make clear, concise decisions about your future.


Every family is unique and every divorce is unique. Reach out to the right people for guidance and avoid making the kind of mistakes that could compromise your and your family’s future.

Note: Financial issues related to divorce that I have addressed with clients over the years are the subject matter of a recent webinar, “Financial Solutions for a Restructured Family: Engaging a divorce professional to protect family wealth,” with Liberty Weyandt, Esq., Partner and Chair of the Family Law Practice Group, Lynch Law Group.

1 – How Do You Avoid the Biggest Mistakes in Divorce? (n.d.). Certified Divorce Coach. https://certifieddivorcecoach.com/avoid-biggest-mistakes-divorce/

IMPORTANT DISCLOSURES

The information included in this document is for general, informational purposes only. It does not contain any investment advice and does not address any individual facts and circumstances. As such, it cannot be relied on as providing any investment advice. If you would like investment advice regarding your specific facts and circumstances, please contact a qualified financial advisor.

Any investment involves some degree of risk, and different types of investments involve varying degrees of risk, including loss of principal. It should not be assumed that future performance of any specific investment, strategy or allocation (including those recommended by HBKS® Wealth Advisors) will be profitable or equal the corresponding indicated or intended results or performance level(s). Past performance of any security, indices, strategy or allocation may not be indicative of future results.

The historical and current information as to rules, laws, guidelines or benefits contained in this document is a summary of information obtained from or prepared by other sources. It has not been independently verified, but was obtained from sources believed to be reliable. HBKS® Wealth Advisors does not guarantee the accuracy of this information and does not assume liability for any errors in information obtained from or prepared by these other sources.

HBKS® Wealth Advisors is not a legal or accounting firm, and does not render legal, accounting or tax advice. You should contact an attorney or CPA if you wish to receive legal, accounting or tax advice.


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