Five lessons from working with divorcing couples

Dorie Fain
Dorie Fain is the founder and CEO of &Wealth, a boutique financial advisory firm dedicated to helping women who are recreating their lives, with offices in New York City and Baltimore.

Published 7/6/2016 in The Maryland Daily Record

Recently, I have been in intense negotiations between divorcing spouses. This is not work for the faint of heart. I finish each work day after these meetings feeling emotionally exhausted and, at times, unclear as to what has been accomplished. With more time and reflection, I become aware that a great deal has actually been achieved that isn’t obvious at the outset. I would like to share five key observations that stand out and have continued to emerge over the course of my career:

What’s “fair”?

The notion of what is fair is just so subjective. One person’s idea of what is right and fair can vary drastically from that of the person with competing interests. Particularly in our experience, where we often represent the spouse who doesn’t want to be divorcing or wasn’t ready just yet to be thrown into the process and who feels that most everything is unfair. The legal process is not designed to make things fair by the definition of a broken heart or betrayed trust. It simply doesn’t and can’t work that way. The laws in place are based more on equitable division. When no amount of money can mend the hurt that has been felt, there can be no true equitable division.

What’s “right”?

One of the single best pieces of advice I received early on in my time as a small business owner is this: “Your principles will cost you money.” We’ve all heard the saying, “Would you rather be right or would you rather be happy?” In the middle of divorce, being right seems the only possible choice. But, as advisers, it is our role to help see the longer term view when being happy means a whole lot more. Holding on to ideals about what is just and what is right ultimately costs time, money and emotional energy – resources that can all be applied in more productive ways. It is critical to be mindful of the bigger picture and open to the idea that being right doesn’t always bring us the satisfaction that being happy will.

What’s the difference?

So often there is a disparity in knowledge and know-how when it comes to division of assets. This is a very common occurrence when our clients, who tend to be women and often are mothers, have been anchored to the family home. Often, the home is one of the larger assets on the balance sheet and a pure expense producer, so we need to be thoughtful and careful about moving this asset to our client’s column. We must analyze the affordability of the home over time and the impact of not having access to an equally valued income producing asset. Retirement plan assets also need to be considered carefully, given the time frame and taxation of accessing these assets. This type of consideration makes a big difference, and we advise our clients to pay close attention to these details.

What’s the main thing?

In the speech that I gave at my brother’s wedding more than 15 years ago, I shared this well known quote: “The main thing is to keep the main thing the main thing.” Often amid intense negotiation, we lose sight of what really is our main goal. We get hazy on the key pieces that will make us feel whole and what we can actually give on. A successful negotiation relies on both parties feeling they had to give and were able to gain in areas that mattered. We encourage our clients to keep notes and have a short list of the things that really matter to them. In the end, this proves to be a great reference when we get bogged down in other issues and find our emotions taking over.

What’s next?

It can be so difficult, at times even impossible, for a grieving spouse to see into her future and know what life is going to look like. We find that the financial piece of the puzzle often helps unlock that vision, but it takes time. When someone hasn’t had a daily grasp on the financial figures, often the numbers aren’t meaningful – they don’t seem real. In time and with experience, the numbers start to make more sense and a future foundation begins to form. The key is to be patient, with each other and with ourselves. These things really do take time and practice.

Dorie Fain, founder and CEO of &Wealth