Financial planning & divorce, Pt. 2

NEST Financial Planning divorce part 2

couple on sofa distant from each other and appear concerned

In our last post, we talked about some preliminary things to consider if you or someone you know is facing a divorce.

First and foremost, talk to your financial advisor. Despite the high emotionality of a divorce, it isn’t a time to neglect financial awareness. Rather, it might be more important than ever to know the true value of your combined assets and how to most effectively divide them

The second and third points are really about being aware of accurate valuation, both in the present and in the future. It’s important to consider the full future implications when divvying up assets. Even in very amicable divorces, splitting things 50/50 isn’t always as equitable as it seems.

In this post, we offer some more things to consider if you’re planning to divorce

DISCLAIMER: We are legally obligated to remind you that the information and opinions shared in this article are for educational purposes only and are not legal, financial, or investment advice.

empty wallet

Consider your cost of living after divorce

The cost of two people living together is lower than two people living apart. And that difference is critical to consider. 

Having a realistic understanding of what your new cost of living will be can help you not only make informed decisions as you divide assets, but also make important adjustments to your long-term financial plan.

If you don’t consider this at the outset, you can quickly find yourself in an uncomfortable financial situation. 

To avoid potential cash flow issues, arrange a financial planning meeting with your advisor. She can help you gain a realistic view of your finances, adjust your budget, and reset your financial goals according to your new lifestyle.


Get things in writing

This might seem unnecessary to say since so much of the divorce process is getting things worked out and in writing. What we’re referring to here are things specific to your accounts. 

Some people, especially retirees, rely on investment or brokerage account distributions for their living expenses. But when they begin the process of divorce, they find that the distributions have stopped because shared assets can’t be touched until the paperwork has been finalized.

This can put people in a tricky situation, with no way to pay for their living expenses.

It’s important that if distributions need to continue, you put it in writing in the petition. Anything not in the petition can be stopped.

Financial Advisors at Nest Financial

Relationship with financial advisor

We encourage both parties to consult with your financial advisor — even if you share the same one. 

At NEST, we’ve even had clients we served as married couples, through their divorce, and as independent clients thereafter. 

Your financial advisor’s job is to make sure that you and your attorney have the best information possible. It is not to pick sides or skew things to favor an outcome for one party over the other.

Both parties should be able to trust their financial advisor. If you feel like you can’t go to your advisor to prepare for an upcoming life change like a divorce, this is an indication of a problem with the relationship.


Small business owners & divorce

If you own a small business, you should take extra precautions to make sure the business is dealt with correctly. 

First, if you have business partners, you should inform them of the potential impacts of your upcoming divorce. Typically, when you start your business, you’ll include certain provisions in your incorporation or LLC. Part of these provisions should be what would happen during a partner divorce, since your business is its own entity.

Second, you should ensure that the business value is included in your assets. Despite a business being its own entity, Texas sees it as community property. Because of that, the spouse is or can be entitled to some of the proceeds or income derived from the business.

Again, this is something that you should discuss with both your financial advisor and attorney.  


Update your beneficiaries

This is especially true for retirement accounts. People set their primary beneficiaries as their spouses, and then never think about it again.

But you’ve updated your will, crossing your t’s and dotting your i’s, making sure everything goes to your kids. You’re covered. Right?

Not so fast. What you may not have known when you started that 401k is that the designated beneficiary on a retirement account supersedes what you’ve said in your will. Meaning, if you don’t update your beneficiaries, your ex will get your retirement funds, should the unthinkable happen.

No one wants that. 

But don’t worry, your financial advisor can help you change them in a jiff.


We’d like to reiterate that this is NOT LEGAL ADVICE. All tips offered in this blog post are only for your consideration. Please take any concerns that are particular to your situation to your attorney and financial advisor. They will be able to offer counsel that is suited to your personal situation.

If you have any further questions about financial planning through divorce, or if you’d like to schedule a financial planning session with Gloria, reach out at

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DISCLAIMER: We are legally obligated to remind you that the information and opinions shared in this article are for educational purposes only and are not financial planning or investment advice. For guidance about your unique goals, drop us a line at