Letitia Berbaum is the founder of Blue Sands Wealth. She specializes in wealth planning, legacy strategies, and business exits.
Divorce can feel like the ground giving way beneath you, watching part of your financial foundation disappear overnight with your lifestyle suddenly at risk. According to a 2023 study in the Journal of Family and Economic Issues, U.S. women see their household income fall by 46% to 50% (registration required) after a divorce. That’s nearly double the decline men experience.
For women divorcing after age 50, the risk is even higher: Researchers found an average 45% drop in standard of living, compared to 21% for men.
Not every divorce leads to losses this severe, but the risks are too important to ignore. You can’t control the divorce itself, but you can control how you prepare and what comes next. And with the right planning, divorce can shift from a painful setback to a critical turning point: the moment you begin building a stronger financial future.
The Stages Of Financial Fallout
The financial fallout of divorce tends to unfold in stages: Before separation, there’s uncertainty about what’s marital versus separate. During the process, cash-flow strain and mounting legal costs take a toll. And after the decree, the focus shifts to implementing settlements correctly. Recognizing these stages helps you prepare effectively for every step.
The Numbing Weight Of Critical Decisions
Beyond the numbers, there’s the emotional toll. The hardest part is often carrying the weight of big financial choices during such a vulnerable time. The fear of making one wrong move that jeopardizes long-term security can leave people frozen. Recognizing the risks is a start, but having a qualified professional on your side to analyze options can help you regain your confidence.
Focusing On Action And Planning
In my work as a wealth manager helping clients rebuild after divorce, I’ve seen how the right plan can transform fear into optimism. Instead of letting divorce define your future, you can take the wheel and steer into the next chapter with control.
Over the years, I’ve developed a process for doing just that. Here are some steps you can take to help create your own security:
1. Take action in the first seven days.
The first week after separation often feels disorienting. But this is when small actions can set the tone for taking charge instead of being swept away by worry. A simple “first-seven-days” checklist helps you create positive momentum and reduce anxiety.
Tasks such as opening a separate bank account, reviewing your credit reports, updating passwords and gathering key financial documents may seem simple, yet together they provide clarity. By creating a baseline view of assets, debts and cash flow, you can begin replacing uncertainty with a framework for informed decisions.
2. Run the numbers on house versus liquidity.
Keeping the house can feel like security, but the costs—mortgage, property taxes, insurance and upkeep—can quickly overwhelm a budget. When too much is tied up in the house, it leaves little room for other assets that may help you generate income or invest for long-term growth. In situations where housing costs outweigh flexibility, selling the home may create more breathing room and a stronger overall financial plan.
3. Untangle executive and complex compensation.
Stock options, pensions and deferred compensation can feel intimidating. Yet, they are often among the most valuable assets in your settlement. If they’re overlooked or miscalculated, you risk leaving potential wealth behind. The smart move is to inventory every grant and benefit, map vesting dates and build a calendar so nothing slips through the cracks.
Even a single unaccounted-for grant can potentially represent a difference in long-term financial security.
4. Build support you can actually live on.
Court orders don’t guarantee stability. Support that looks fair in writing may fall short of covering your needs. That’s why creating a lifestyle analysis is essential. By identifying potential issues up front, you have time to help avoid debt or severe cutbacks.
This is also the time for intensive tax planning, so an unexpected bill now or in the future doesn’t derail your settlement.
5. Plan beyond the decree.
Divorce doesn’t end when the ink dries. Too many people stop at the decree, only to discover costly mistakes later. Every qualified domestic relations order (QDRO), title transfer and beneficiary update must be finalized to protect your future.
Then, your “next chapter” has to be designed. That should include creation of a financial plan that covers retirement, investments, college funding and estate planning. Regular tax planning can also help ensure you keep more of what’s yours.
A New, Better Beginning
Too often, women have been excluded from financial conversations or left out of key decisions. Divorce can be the turning point where all that changes. It may mark the end of one chapter, but it can also be the beginning of a stronger one—an opportunity to rebuild, regain confidence and create a financial foundation no setback can undo.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation. Advisory services offered by Investment Advisory Representatives of RFG Advisory, LLC (“RFG Advisory” or “RFG”), a registered investment advisor. Blue Sands Wealth and RFG Advisory are unaffiliated entities.
Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?