Divorce Financial Planner, New England Divorce Solution, Boston, Massachusetts

Article

Ensuring safety after the split
You don't have to get divorced from all financial security
by Becky Bell

This article was first published in the Texarkana Gazette June 29, 2006.
(Editor's note, August 25, 2008: Tim McNamara is now the co-founder of New England Divorce Solutions and owner of McNamara Capital, located in Boston, Mass.)

Planning for a financial future is a challenge, but when something as major as a divorce happens, a person can be left emotionally and financially drained.

This is something that Lisa Shoalmire of the Ross & Shoalmire law firm in Texarkana deals with daily . About 70 percent of her time is devoted to dealing with divorces, so she often works with older clients whose financial futures are perhaps more significantly affected by divorce.

"Frankly I am seeing more and more clients, not necessarily in their 50s, but lots of them in their later 40s who don't have time to get a whole new life," Shoalmire said. "These are not people who get divorced at 24 after a starter marriage."

While Shoalmire said many younger clients can simply walk away from the marriage with the hope of another opportunity to better themselves financially, older people who have spent the bulk of their working life married often face deep financial troubles due to divorce, particularly if one partner has less education and less earning potential.

With more riding on the bottom line for people who are older and going through a divorce, some are creating a network of people to help them through the process.

Dustin Stringer, an investment representative with Edward Jones, said it is important for someone to seek professional legal help when going through a divorce.

"Once that is done, they need to make sure and not withdraw anything until they have discussed their options with a local investment representative," Stringer said.

A common mistake people make dealing with finances—whether going through a divorce or not—is taking advice about money from people who have no specific training in dealing with money, he said.

"You don't want to go to the grocery store and talk about these things. Many times people turn to someone or talk to someone they can relate to, or someone they feel like is successful but sometimes people who are very successful at their profession are still not able to manage money matters," he said. "A lot of people know how to make money but don't know how to make their money make money."

Sometimes people going through a divorce immediately think paying off all their debt is the right approach, but that isn't always the case, he said.

"They tend to pay off all their debt due to fear, and sometimes that is not in their best interest," he said. "Some debt is good debt. People need to take their time and not make the decision when you are emotional. They need to have someone as a soundboard who they can bounce ideas off of."

Besides an attorney and an investment representative, sometimes people have the need for even more assistance when going through a divorce. These days, some hire a neutral party —a certified divorce financial analyst (CDFA)—to scrutinize the financial statements of the relationship and come up with a solid plan.

Hiring a CDFA is not a replacement for hiring an attorney or a mediator; rather, they work together to benefit the client.

"It's very important, when going through a divorce, to surround yourself with experienced experts such as the invaluable matrimonial attorney, mediator and therapist," said Timothy

McNamara, a CDFA who owns McNamara Financial Strategies Group of Wachovia

Securities in Waltham, Mass. "I know first-hand just how financially devastating the crisis can be. That's why I strive to help others avoid financial destruction in situations like this."

McNamara has managed money professionally for the past 16 years. After his own divorce in 2001, helping others with financial struggles became a passion.

"I felt that I wanted to give back a little bit more," he said. "This allows me to help someone with more than just raising their (financial gains) a point or two in the (S&P 500Index). I wanted to help people in this area of divorce because it is a really difficult time.

People are gripped by the paralyzation of fear both personally and financially. For me this is a way to be able to give back and resolve their financial concerns before it is too late."

A certified divorce financial analyst scrutinizes the financial backgrounds of a client to create informative spreadsheets that help the matrimonial attorney discern a client's financial status. CDFAs gather and sort through the mountains of financial statements that include years of tax returns and months of check registers. All this is done in an effort to prepare the most important document in a divorce—the statement of net worth.

"If a client's divorce goes to trial, this is the most important document ever prepared in the eyes of a judge who will be reviewing this one piece," McNamara said. "Often attorneys try to prepare this document themselves or, even worse, delegate it to their paralegal staff who has no training in divorce finance and does not know what to look for with every number being entered on a line."

McNamara said a qualified CDFA will look at everything, including personal and businesstax returns, dividing pension plans, continued health care coverage and stock options. McNamara points out is that lawyers are experts in law, not finance. Many people are learning how important it is to hire a qualified analyst to thoroughly investigate the financial situation during a divorce.

"Most individuals, even those who are financial savvy, don't make good financial decisions during this trying period of their lives," McNamara said. "In fact, in that situation, most individuals make such poor decisions that they feel the effects for the rest of their financial lives."

(Back to article list)