Along for the Ride

When asked the secret of his long marriage, comedian henny youngman said, “We take time to go to a restaurant two times a week–a little candlelight dinner, soft music, and dancing.” A pause. “She goes Tuesdays, I go Fridays.” Sure, this is the same guy who cracked, “My wife dresses to kill. She cooks the same way,” but he did manage to stay married to that wife for several decades–until death did them part, as a matter of fact. That’s better than a good part of the American population, which has the highest divorce rate in the world. Currently, more than half of all trips down the aisle will end in a trip to a lawyer’s office.

Untying the knot is rarely pretty, of course, and sometimes it can be downright dangerous. Go to any courthouse in America, and chances are you’ll have to walk through a metal detector before you’re allowed in. Is it to guard against the homicidal maniacs, the serial crazies, the defendants charged with assault and battery? Nope, says financial planner John Connell, 56, who specializes in financial planning for divorcing spouses. It’s for the folks headed to divorce court. “They’re shooting the attorney on the other side, they’re shooting their wife, or whoever they’re mad at,” he says. “All that hardware is for the marital dissolution cases.”

So far, at least, Connell has avoided getting shot at, and the low-key CPA-planner doesn’t even seem to mind the violent emotions that swirl around him and the five other members of the financial planning and divorce litigation services department at Causey Demgen and Moore, a large accounting firm in Denver. In fact, he says, colleagues outside the department envy the ever-roiling intrigue. “The rest of the office loves what we do here, because the stories are always so intriguing,” he says. His days are not as dramatic as his favorite television show, “Law and Order”–but sometimes they come close. “Divorce cases are not like, ‘Where were you on the night of . . .?’ and ‘Didn’t you really tell Detective So-and-So this, and now you’re changing your story?’” He laughs mildly. “But it can be hugely emotional and traumatic for the clients involved.” Connell has seen some estranged spouses dissolve into tears on the stand; others have stormed out of the courtroom. And turmoil isn’t just reserved for the clients. Although four out of five of his clients will settle out of court, Connell frequently takes the stand as an expert witness on matters related to the division of marital assets, an experience which opens him up to getting screamed at by the opposing side’s attorney. Needless to say, this is not always a picnic. “I can’t really get into to detail about it,” he says, “but yes, absolutely, I have had [the experience of being screamed at] happen many times.”

Crash Course in Finance

Despite the melodrama, Connell prefers to think of his work in terms of a less adversarial profession: teaching. Since many of his clients have had minimal involvement in their families’ finances during their marriages, education is paramount. “I tell people, ‘We can do your financial plan very easily, but unless you understand the process and are comfortable with the process, we haven’t accomplished what we set out to do,’” he says. “A big part of my responsibility to my clients is being a teacher–educating them about the process, what their options are, and how to monitor their situation as it changes.” He’s mindful not to generalize about people, but he finds that women ending lengthy marriages tend to be the least knowledgeable about money. “You have to be careful how you say this,” he says, “but frankly, [a lack of financial knowledge] happens mostly with women who have been in marriages a long time. A lot of our clients are women who don’t work and have never had to take charge of the responsibility for their own finances. Their husbands took care of everything.”

Not only do the women have the least financial experience, after the divorce proceedings begin they’re less likely even to have a planner at all. “Ninety-five percent of the time, the allegiance of the couple’s planner is to the husband,” says Connell. “The wife feels like she needs somebody to represent her, which is one of the reasons we represent more women than men.”

Most clients come to Connell just as their divorces are getting rolling; some stay on just until their divorces are settled, while others remain clients for years afterward. “We work with them from when they’re crying and they hate the SOB, all the way until they get to the point where they’re saying, ‘How did I ever stay married to him for so long?’” he says with a chuckle. “They [all] stay until they get on their feet, and then some leave and others stay for the long haul.”

The most rewarding part for Connell is seeing clients weather the emotional storm of divorce and gain confidence in their ability to make financial decisions. “It’s very difficult for them to get through the divorce, and afterward they’re very scared and timid for the first year or so. As time goes on, they become more and more confident, they realize they can stand on their own two feet, and they’ve become much more comfortable with financial matters,” he says. “I love the little notes that say, ‘You helped me get through a difficult process.’”

Fair Is Fair?

And a difficult process it is. Regardless of how you measure the financial stakes (Connell’s clients are wealthy, so their divorce settlements aren’t so much a matter of putting meals on the table as maintaining a certain well-heeled, well-wheeled standard of living and facing the “dilemma” of making $5 million last for the rest of their lives), the emotional stakes are always sky-high; having the hubby try to run off with more than his fair share invariably grates on the nerves whether the imbalance is $500 or $500,000.

With the spouses issuing death warrants on each other and attorneys looking daggers at one another across the courtroom, Connell often finds that he and the opposing side’s financial advisor or accountant can make peace where no one else can. “It’s much more effective if you work with the advisor on the other side instead of working against him, and frequently–because of the emotions of the clients, or maybe the personalities of the attorneys–it’s very typical that we CPAs can get together and resolve issues that can’t seem to get resolved on another level,” he says. “CPAs aren’t as adversarial as attorneys, and generally we can say, ‘Here’s my point of view; what’s yours?’ and try to understand the things the other person is saying.’” Since both planners have generally worked on both husbands’ and wives’ cases, they know each other’s perspectives and are familiar with each other’s arguments. And without the pressure of “winning” or “losing,” the advisors are free to work toward a reasonable settlement that will satisfy both parties.

Despite the stereotypes of vindictive, finger-pointing spouses, Connell maintains that most divorcing couples don’t enter into the divorce proceedings with fire–or dollar signs–in their eyes. “Everyone always starts out by saying, ‘I want to be fair,’” he says. “That’s what everybody always says.” There’s just one problem: Once the divorce moves from the mature we’re-better-off-apart stage to the grabby who-gets-the-Porsche? stage, “it becomes very obvious that each side has a very different outlook as to what fair means.”

To figure what fair really does mean, Connell assigns the client some homework. Kristen Henry, whom Connell assisted with her divorce planning in the mid-1990s and for whom he still acts as a financial planner, remembers making a list of how much she spent per month on everything from clothing and recreation to medical services and utilities. “I was leaving a 29-year marriage, and I had a standard of living that I had grown accustomed to and wanted to maintain as much as possible,” says Henry. “So it was important for me to come up with figures for John to use in his calculations.” She also told Connell what kind of house she’d be comfortable living in, so he could calculate how much her mortgage payments, utilities, and insurance would cost.

Once he knew how much she felt she’d need, Connell ran simulations based on the various assets up for grabs in the divorce and on various life choices that Ms. Henry could make. What if she took most of the settlement in retirement plan assets? What if she took the house, or another, less liquid, asset? What if she lived in a slightly smaller house? What would happen to her nest egg if she took a job for five years? What if she continued doing volunteer work, rather than being employed, instead?

The primary purpose of this “capital sufficiency analysis” is to guide clients’ attorneys in choosing their battles in the courtroom. If the attorneys know that the client’s financial welfare is dependent on securing a certain percentage of the spouse’s retirement plan assets (which is often the case for women who have never worked, says Connell), they’ll fight tooth and nail for those, while compromising on other matters.