Many people are surprised when we share with them they have left a lot of money on the table in their divorce process. They wonder how this could possibly have happened. The reality is the labeling structure (e.g. cash, real estate, investments, etc.) usually does not represent all of the negotiable items that need to be brought forth in the discussions. As a result, people lose lots of money in the process. The money they lose may not be from each other per se. Rather they could lose money from other parties (e.g. government, insurance carrier, banker, etc.).

A common example we share with people is take the concept of real estate. On your personal balance sheet this is labeled “primary residence, vacation home, rental property, time share, etc. On the surface this sounds like a reasonable description. What people think is all I have to do is determine the value of the real estate. Use that value to allocate it between the two spouses and that step of the process is complete. 

If you dug into the details you would quickly discover the term “primary residence” (or any of the other labels) have attributes associated to them. Doesn’t a primary residence, for example, have the following attributes associated to it that have to be called out and managed in a divorce process?

  • Down payment
  • Appreciation
  • Legacy liabilities (driveway repair, etc.)

These are just a few among many that are associated to a piece of real estate. 

What happens if you do not call out these details? Won’t you lose a lot of money in the process? If you do call them out then they become “tradable components”. Furthermore people do not feel they got financially hurt after the fact with little recourse to pursue for that matter.

Now think about your other assets, liabilities, income and expenses. They have many attributes associated to them too. The key takeaway here is how you define the labels on your personal balance sheets and income statements will impact your financial outcomes.

If you utilize a detailed labeling structure (often referred to as a taxonomy) you will uncover many hidden issues where you can make or save lots of money in your divorce process. People are surprised they can actually make money during their divorce. Again, not from each spouse but other parties. All legitimate too.

Key message: Be careful which financial labels you use for your divorce process. These labels could cost you a lifetime of grief and money.

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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