Decisions that you, or your advisor make on your behalf, for your divorce can have a significant impact on your financial outcomes. Below are 4 process risks that few people discuss yet can pose significant risks to your financial life, and your children’s financial lives, in the future.

Risk 1 – Using an incomplete marital estate as the basis of your settlement structure

Often the marital estate does not reflect all of the assets, obligations, income or expenses such as: future college demands, elder care expenses, tax attributes of certain assets, etc. Prior to designing your settlement structure, it is important to have a clear understanding of your entire marital estate. This can involve issues around insurance, how your business influences your marital estate, among other factors. You need to think through how the different financial components are and are not working together today and what could impact your financial life and your children’s lives in the future. If you don’t then you will find yourself financially exposed later on saddling burdens you didn’t expect.

It’s important to note that your marital estate is the basis of your settlement structure. If you design your settlement structure based on an incomplete marital profile you will end up with an incomplete settlement structure. Your settlement structure gets memorialized into your divorce decree. Your divorce decree contains the language which you have to live by after your divorce is finalized. You can call the language in your divorce decree ‘the future constraints you will have to live with in your life’. The language in your divorce decree shapes your life after the divorce and can cause much stress and anxiety. You can manage some of these issues. Ensure your marital estate properly portrays your life today and into the future. In our process, we call this ‘Step 1’ where we Profile Your Marital Estate; it is the basis for just about everything else that comes through the process. If you are in a divorce process and have not gone through Step 1 then you should step back to make sure you maintain quality in your process. You may have to rethink issues to ensure you are not accidentally making missteps along the way.

Risk 2 – Not using the right skills with the right processes at the right points in your divorce process

In divorce processes, attorneys bravely step up to the plate and absorb a lot of risk for their clients. They assume multiple roles in the divorce process even though they openly share their core skill set is resolving and advocating for a client’s legal rights. Clients assume attorneys are skilled at everything. Attorneys try to be superwoman or superman functioning as the legal expert, financial expert, mental health expert and more. Truth be told, no person can do all of these things well. Divorcing parties who enter a divorce process need to ensure they have a small team of experts who have the right skills with the right processes that they can employ at the right points in time in your divorce process. Otherwise you may end up with a solution that is deep in one area but unintentionally lacking in others.

The legal issues, financial issues and psychological issues all impact each other. To help you manage your outcomes, each discipline needs to be managed by your advocates who are experts in their fields. This is about managing your risks for the life that awaits you after your divorce is finalized.

Risk 3 – Not engaging a personal financial advocate to manage your changing negotiating position
Most, yet not all, of the issues in a divorce are centered around your financial outcomes. Yet, many divorcing parties enter the divorce process without a personal financial advocate who understands how to manage negotiating positions. In the midst of the emotional upheaval they find themselves in a compromised negotiating position. They wonder how they got into this position. What appeared to be a slam dunk is turning out to be something very different. The common comment that we hear from divorcing parties before they become clients is “I thought I was in a strong position. How did I end up here?” It is all about the process and having someone help you be wary of and manage your negotiating position. It changes constantly throughout the divorce process.

Risk 4 – Not paying someone to ‘close’ your divorce process
If you do not pay someone to focus on closing your divorce process, it can remain open longer than necessary. Sounds kind of crazy but this is what many people experience in their divorces. These divorce processes go on and on. An open process can expose you to undue risk. Risk comes in many forms such as a longer discovery period, change in your asset profile or income profile which positively or negatively becomes part of the marital estate, lost opportunity to sell a property due to changing market conditions, and a significant emotional drain on you which can impact how your relationships with your children.

Divorce processes also extend when your spouse reacts unfavorably to a settlement offer; your spouse may involve additional advisors which can change the game and disrupt your plans. Having someone paid to close your divorce process is critical to manage your exposure.

About the Author

Larry Smith is a Founding Partner of Divorce Outcomes, a specialized professional services firm that manages all of the financial aspects in a divorce process. Since 2003 he has worked as a trusted financial advisor, financial advocate, divorce architect and technical financial expert; he is not an attorney. He is an alumni of KPMG and Andersen with expertise in technical accounting, forensics, sophisticated taxation, management consulting, risk management, advanced process engineering, business combinations, divorce management, multi-party negotiations, advanced quality analytics and cognitive performance technologies. Since 1986 Larry has been advising individuals and organizations about innovative financial solutions to resolve complex financial challenges that arise in life and in business.

For both personal and business divorces, Larry is considered an expert in divorce strategies, divorce process management, financial divorce architecture, financial risk management, taxation for divorces, financial divorce forensics, advanced divorce analytics, financial divorce negotiations and mediation, business valuations and sophisticated equity structures. He helps clients shape complex financial decisions, manage communication risks and ever-changing negotiating positions to strategically preserve or grow wealth from these types of transactions.

If You Have a Question

If you have a question, feel free to contact me at [email protected] or 617-680-5222. The call is free. I will spend 30–60 minutes with you. I will provide you an honest assessment as to where I think you are positioned in your divorce process or answer any questions you have. I may provide you some guidance, insight or advice that you can take with you as you wish. There is no obligation to move forward. The phone call is designed to ease your fears, provide you some options to pursue and a potential road to run on that can lead you down a path to achieve a successful outcome.

About Divorce Outcomes

Divorce Outcomes is a specialty services firm that helps people both domestically and internationally manage all of the financial decisions that arise in their divorce process. We are not attorneys. We are financial experts who partner with our clients as their personal financial advocates. We help our clients manage their divorce process, uncover hidden financial risks, architect divorce solutions, manage ever-changing negotiating positions, communicate complex financial matters and close the divorce process as soon as possible with a goal to arrive at the best outcomes possible. Throughout the process we evaluate the current state of our clients’ financial lives with an objective to best reposition their future. We do not sell any products. We simply raise issues that are in our clients best interest. Our clients share with us we:

  • unfold, analyze and repackage their financial life so they are well positioned after their divorce
  • preserve the value of their business or marital estate
  • continuously strive to provide a return on our services
  • build balanced financial solutions grounded in evidence
  • find ways to make our client, and at times both parties, money through the process
  • design their divorce to work for them and their family’s life
  • provide mental clarity to make decisions
  • reduce the total process time from start to close
  • minimize the stress and unpleasant memories that can last a lifetime

As we reach an agreed upon settlement structure, we help our clients identify a fitting attorney who can leverage the financial solution to draft and record the requisite legal documents. Where outcomes are at risk from a traditional process, we function as expert financial negotiators or financial mediators to turn around the situation and achieve our client’s desired outcomes.

Learn more about us at or review our blogs to gain a clearer understanding about our approach and how we maximize the financial outcomes for our clients.


This communication is for general informational purposes only which may or may not reflect the most current developments. It is not intended to constitute formal advice or a recommended course of action as every person’s situation is unique and different. The information here is not intended to be, and should not be, relied upon by the recipient to make a decision without professional guidance.


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