EP Wealth’s Regional Director, Kelly Owens, CFP^®, CDFA^®, shares key steps for building a strong financial future after a collaborative divorce, from budgeting and debt management to long-term planning.

How to Build a New Financial Future After a Collaborative Divorce

Collaborative divorce takes a cooperative approach to ending a marriage. Instead of an adversarial process where two sides fight it out through go-betweens and court hearings, the collaborative approach brings the spouses, their lawyers, and other trained professionals together at the same table to work toward an outcome that feels fair and workable for both parties.

As a Certified Divorce Financial Analyst^®, what I love about the collaborative process is that it helps people move forward from divorce in a much healthier position. You’re not living with a settlement that was imposed on you by a judge or shaped by conflict. You’ve had a say in the outcome, and you’ve already established much of the groundwork for your financial future.

During the process, many clients work closely with a financial advisor to develop a post-divorce plan that addresses both immediate needs and long-term goals. That preparation goes a long way in helping you start the next chapter of your life with clarity and control.

Still, even after a collaborative divorce, there are new realities and challenges to face. With the right guidance and a few key strategies, you can build on the foundation you’ve created and continue moving toward long-term financial confidence.

Initial Post-Divorce Financial Steps

Partner with a Financial Advisor Right Away

After a divorce, one of the first steps you can take is connecting—or staying connected—with a financial advisor. This isn’t the time to try to go it alone. Your circumstances have changed, and getting a clear picture of where you stand financially is critical.

At EP Wealth, we use financial planning software that help illustrate cash flow and portfolio outcomes for decades into the future based on different assumptions. When you can see your assets, income, and spending modeled in black and white, with charts and graphs that illustrate how your financial life may look like 10, 20, or even 30 years from now, it helps bring clarity to your decisions.

Whether you’re still working and planning for retirement or already retired and drawing from savings, having that plan in place can help guide your financial decisions moving forward.

Set Clear Financial Goals

Goal setting after a divorce looks different for everyone. For someone still in the workforce, priorities might include retirement savings, buying a new home, or funding a child’s education. For someone already retired, it might be about maintaining lifestyle comfort and managing withdrawal rates.

One of the most common questions I hear from clients is, “Am I going to run out of money?” It’s an understandable fear, especially for individuals—often women—who didn’t handle the finances during the marriage. A big part of my job is helping them see that their money can work for them in a structured way. When we map out spending, saving, and investment projections, it often helps replace uncertainty with a sense of control.

Establish a Realistic Budget

Creating a realistic post-divorce budget is essential. You may have already started this during the divorce process, but once you’re on your own, the numbers become real.

For high-net-worth clients, this can mean taking a closer look at lifestyle choices. Large homes, luxury spending, and generous travel budgets may need to be revisited. It’s not about eliminating what brings joy, but about identifying what’s sustainable.

I often tell clients to start by separating non-discretionary spending from discretionary spending. From there, we can look at where adjustments make sense. For clients who weren’t previously involved in household finances, taking ownership of this process can feel daunting at first. But over time, it becomes empowering.

Address High-Interest Debt

Divorce can sometimes leave one or both spouses with high-interest debt. Addressing that early can help keep it from undermining long-term plans. We work through how to prioritize debt repayment alongside savings and investment goals so the client can maintain forward momentum.

For Non-Working Spouses: Evaluate Returning to the Workforce

For clients who haven’t been working, an important question is whether to return to the workforce and what that might look like. Reentering the job market after years away can feel intimidating, even for those who are highly educated or once had established careers. The reality is that you may not be able to step back in at the same level you were at before. Many fields have changed significantly, and new technologies or professional skills may be required. In some cases, it makes sense to start at a lower level and build back up over time.

Another key factor to consider is benefits. After a divorce, you may no longer have healthcare coverage through a spouse’s plan, and you may need access to an employer-sponsored retirement account such as a 401(k). These benefits can be just as valuable as salary, especially if you are focused on rebuilding long-term financial security.

Real-World Example:

One of my clients faced this situation. She had been an attorney but had stepped away from her career for many years to raise her children. Following her divorce, she needed to return to work but knew it might take time to rebuild her career. She accepted a position as a clerk for a judge. The pay was modest, but the federal benefits were excellent, giving her healthcare coverage and access to a retirement savings plan. The job also allowed her to reconnect with her profession and rebuild her confidence. Today, she’s thriving in her career.*

*The example presented is hypothetical and for illustrative purposes only. They do not represent actual client experiences or outcomes. Past results are not indicative of future performance. Individual circumstances will vary.

I’m happy to say I’ve seen many similar situations that played out like this over the years. After a divorce, the first steps forward may seem small, but they often open the door to much bigger opportunities ahead.

Building Your Post-Divorce Financial Foundation 

Common Financial Blind Spots and Misconceptions

Even with a solid financial plan in place, it can take time after a divorce to adjust to managing money independently. Along the way, certain habits can easily develop that are not necessarily in your own long-term best interests.

• Overspending: Some clients withdraw from assets too quickly, often to maintain the same lifestyle they had before the divorce. Without careful planning, that can deplete savings faster than expected.
• Underspending: Others go to the opposite extreme. They’re reluctant to spend money, even when their plan clearly shows they have the means to do it. If you’ve spent years focused on saving, it can be hard to shift gears once you’re in a position to enjoy what you’ve earned.

• Emotional Spending: Money and emotions are deeply connected. Retail therapy or avoidance spending can creep in during stressful times. Recognizing the connection between emotion and spending behavior is a first step toward changing it.

As advisors, we can guide clients toward healthier spending patterns and help keep them accountable. While I can’t control a client’s behavior, I can provide the structure and education that help them make informed choices.

Effective Post-Divorce Strategies

Once your financial plan is in place, several practical steps can help you move forward into the next phase.

• Implement and stick to your new budget.
• Open accounts in your own name and close joint accounts.
• Review and update beneficiaries on insurance policies and retirement plans.
• Establish or update estate documents, including your will and powers of attorney.
• Review your retirement savings strategy or withdrawal rate.
• Conduct a tax analysis, especially if you’re filing as an individual for the first time. At EP Wealth, we can connect you with tax professionals when needed.

There’s often a lot to do post-decree. My role as an advisor is to act as the “quarterback”—but since one of my sons was an offensive lineman, I like to tell people I act as the “center.” I call on a network of professionals to build a team around you, including tax accountants, real estate agents, mortgage brokers, insurance specialists, and others.

Post-Divorce Financial Priorities 

Evolving Financial Priorities

Your financial priorities will continue to shift as your life evolves. That’s why reviewing and adjusting your plan annually is so important.

If you begin earning new income or your circumstances change, it may make sense to adjust your withdrawal rate or rebalance your portfolio.

For clients entering new relationships, I always like to emphasize the importance of staying actively involved in their own finances. I’ve worked with many women during divorce who hadn’t managed money during their marriages and were completely removed from the day-to-day financial decisions. I often have a mantra for them to repeat: “I will never let another man control my finances.” I actually make them say it back to me. It’s not about instilling mistrust; it’s about education and awareness.

I try to stress how important it is for both women and men to understand their own financial situations and stay engaged so they never hand over complete control to someone else.

The Financial Advisor’s Role and Value

In my role as financial advisor, I want clients to see me as a resource for all kinds of financial decisions, big and small. It might be something as major as whether to sell the house or buy a new one, or as simple as whether to lease or buy a car. When clients reach out to talk through these everyday questions, it shows me they’re taking their financial lives seriously. They’re paying attention to details, asking the right questions, and becoming more confident with each decision.

At EP Wealth, we are committed to building lifelong relationships with our clients. We’re there through everything: marriages, divorces, new babies, grandkids, career changes, loss of loved ones. When I work with divorce clients, I often meet them during one of the most difficult times in their lives. Whether the divorce was their choice or not, it’s always a major transition filled with change and uncertainty. With careful planning and support, individuals can work toward regaining stability and confidence over time. Helping clients navigate this transition and planning for their next chapter is incredibly rewarding. There really is light at the end of the divorce process, and it’s my privilege to help clients toward it.

Want to learn more? Speak with an advisor who understands your needs and can help you move forward with clarity.

DISCLOSURES

• EP Wealth Advisors, LLC. is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the advisor has attained a particular level of skill or ability.
• Request an appointment with an EP Wealth Advisor when you have a minimum of $500,000 in investable assets – which includes qualified retirement plans (IRA, Roth IRA, 401(k), taxable brokerage, cash (savings / checking) and CDs. Investable assets do not include your home, vehicles, or collectibles.
• Hiring a qualified advisor and/or financial planner does not guarantee investment success, and does not ensure that a client or prospective client will experience a higher level of performance or results. No guaranty or warranty is made that any direct or implied results or projections being represented here will be met or sustained.
• The need for a financial advisor or financial planner and/or the type of services required are specific to the uniqueness of each individual’s circumstances. There is no guarantee or warrantee that the services offered by EP Wealth Advisors, LLC will satisfy your specific financial services requirements. Services offered by other advisors may align more to your specific needs.
• Information presented is general in nature and should not be viewed as a comprehensive analysis of the topics discussed. It is intended to serve as a tool containing general information that should assist you in the development of subsequent discussions. Content does not involve the rendering of personalized investment advice nor is it intended to supplement professional individualized advice.      
• EP Wealth Advisors (“EPWA”) makes no representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information presented. All expressions of option are subject to change without notice.
• All investment strategies have the potential for profit or loss. Different types of investments and investment strategies involve varying degrees of risk, and there can be no assurance that any specific investment strategy will be suitable or profitable for a client’s portfolio. The risk of loss can never be eliminated even if working with a professional.
• Laws vary by state. The information presented herein is intended to be general in nature and may not apply to your state of domicile. Please consult local legal counsel to determine the best practices for your state.
• There is no guarantee or warrantee that a client or prospective client that engages EP Wealth Advisors, LLC in Divorce Financial services will experience investment success and does not ensure that a client or prospective client will experience a higher level of performance or results. No guaranty or warranty is made that any direct or implied service, offering, report, or analysis represented here will be offered or delivered. The services offered to clients will vary and depend on several factors.
• There is no guarantee that all the services detailed herein will be offered to a client. The services EPWA offers clients is dependent on the requirements of each client. In many instances, clients or prospective clients may not have a need for all or some of the services detailed.
• The Certified Divorce Financial Analyst (“CDFA®”) that are employed by EP Wealth Advisors, LLC are not practicing attorney, accountant, tax professional, or legal expert. All assessments and subsequent recommendations limited and are performed exclusively under the guise of financial planning. An attorney must be retained in order to professional and accurately assess legal options and/or to provide counsel. We also recommend consulting a CPA, accountant, or tax professional.
• Hiring or working with a CDFA® does not guarantee or ensure that a client or prospective client will experience encouraging or favorable results.
• The decision to work with a CDFA® professional will differ amongst clients and depend on individual circumstances of each respective client. There is no guarantee or warrantee that the services offered by EP Wealth Advisors, LLC and/or a CDFA® will satisfy your divorce service needs. Services offered by other professionals may align more to your specific needs.