Don’t worry, it’s not divorce week and you missed it. We just like to group these little stories of ours thematically sometimes. Go back to our last blog to see another instructive little tale about how to cope when you are no longer together.
We were once asked to check a spreadsheet for a woman going through a divorce.
Her husband had made it.
It was a tidy, professional-looking thing, all columns and totals, and it laid out, line by line, what she would be keeping. It amounted, in effect, to a statement of what she was “allowed”.
Allowed, by him. Out of assets built across a long marriage, handed to her as a settled matter by a man who had run the numbers his whole life and rather assumed she couldn’t.
There’s a stereotype about divorce, the grasping wife, out for all she can get, taking a decent man to the cleaners. We’ve been advising people through divorces for a couple of decades, and we have once seen something like it. It exists but it is easily the exception.
Far more common is the version above. The spouse, and it is usually the wife, who never controlled the money, doesn’t fully know where it all sits, and is now being told the size of her share by the very person she’s divorcing.
We’ve seen most of the tricks over the years. Assets valued at less than they’re worth. Income made to look smaller than it is, especially where someone owns a business and keeps its books.
Of course the Courts have too which is why there is often a pressure from one side to avoid lawyers and courts.
Pressure applied to settle quickly and quietly and for less than half, dressed up as the dignified, reasonable, un-greedy thing to do. The thing that will unsettle the kids the least. Occasionally, as with the spreadsheet, the sheer nerve of presenting the outcome as already decided.
None of this usually happens because one person is a monster. It happens because one person spent the whole marriage holding the information, and information, at the end of a marriage, is power. The spouse who knows becomes the spouse who decides. The one kept at arm’s length from the money spends the divorce at arm’s length from the truth of it.
When one person runs everything and the other is kept comfortable but uninformed, the uninformed one is badly exposed the moment the arrangement ends. And in the marriages of a certain generation especially, that person is usually the wife.
The immediate remedy, when someone arrives at a divorce in that position, is to put somebody genuinely in their corner: an adviser who can read the accounts, value the pensions properly, see through the conveniently modest business valuation, and make sure that what’s being “allowed” bears some relation to what actually exists. It closes an information gap that has often been thirty years in the making. It’s some of the most satisfying work we do, precisely because the person walks in braced to be short-changed and walks out with what was genuinely theirs.
The better way to tackle this is to be prepared when you enter marriage, not to get divorce but to work on the finances equally. Both people in a marriage should understand the money, when things are good and nobody imagines they’ll ever need to. Not because you’re planning to split, but because financial exclusion is a vulnerability even in a happy marriage, and an acute one at every crisis: divorce, yes, but also illness, death, incapacity, the sudden day when the person who “did the money” simply isn’t there to do it.
A spouse who understands the finances then cannot be handed a spreadsheet of what they’re “allowed”. They already know.
We checked that spreadsheet, in the end. It was, as you’d expect, wrong, and wrong in the predictable direction. What she was actually entitled to was rather more than what she’d been “allowed”.
But the number was never really the point. The point was that a grown woman, entitled to half of what a long marriage had built, had been made to feel she was receiving a gift, its size decided by someone else, at his discretion.
Nobody should have to be allowed their own money. And the best protection against it is gloriously boring, and available to every couple long before any of this ever arises: both of you, knowing where it all is.
We help people in Hook and across Hampshire, Surrey, Berkshire, Sussex and Kent see their whole financial picture clearly, together, well before anything forces the issue. It’s the least dramatic advice we give, and some of the most important.
Altor Wealth Management LLP is authorised and regulated by the Financial Conduct Authority (FCA number 769033). Registered office: Landmark House, Station Road, Hook, Hampshire RG27 9HA. This article is general information, not personal advice, and is not legal advice on divorce or financial settlements. Details have been changed to protect privacy.