Separation Anxiety

Even those advisors who don’t specialize in “divorce planning” often get involved with their clients’ marital situations and dissolutions. And while some news reports have touted the events of September 11 as being a great impetus for couples to dismiss all plans of divorce, attorney Marlene M. Browne says that she and her colleagues have found otherwise. “It’s more a case of ‘Life’s too short,’” says Browne; couples are deciding in a flood to divorce and get on with their lives.

What are some of the biggest issues facing divorcing couples and their advisors? “Valuing businesses is more important than ever, but more difficult,” Browne says. “With the fallout of September 11, the country did no business for seven days.” This has seriously affected how businesses are valued in divorce settlements or splits, since for many businesses it’s not known yet whether that loss of business was a “blip” or whether the business will, in fact, fail. “The money isn’t there now to pay what they thought they would pay,” says Browne. “Cash flow is a problem and no one knows when it will change.”

Browne also points out that advisors will have to decide whether it’s worth it to hire a forensic accountant to determine where the money went. With the downturn in business and the loss of valuation in so many areas, spouses might not be hiding assets; those assets may simply be gone. Do your homework before deciding whether the expense of a forensic accountant is worth it, or whether your client might simply be left with another bill and no assets with which to pay it.