judge, divorce financial analyst

Clients often complain a judge’s decisions are arbitrary and uninformed. It helps to illustrate exactly what happens to information in the litigation process.


A family court judge has a lot of information thrown at them in very short timelines.


Depending upon your jurisdiction, a judge might have to here every piece of a case from spouses bad-mouthing one another to accusations of infidelity to child custody disputes and forensic accounting to prove lifestyle or separate property claims. It is natural for there to be two sides to each issue as divorce is a dispute after all so the judge must often here the same story twice just told in two different ways.


Judges are tasked with listening, understanding and ultimately rendering decisions. In order to do so they must understand the flow of information and our clients should too.

Where to begin

When it comes to a family’s financial picture it is unlikely that anyone will start a divorce proceeding with an accurate and complete picture of everything. This is why data-gathering is so important to a divorce case. The largest box in the cartoon represents the actual complete financial picture.
An attorney is tasked with gaining an understanding of the family financial picture in order to educate a judge and argue their client’s case in a divorce matter. It will never be 100% complete and 100% accurate because it is not their life. It is rare that an individual has a complete and accurate understanding of their own finances. It would be overly optimistic to assume an attorney can ever understand something more intimately than their clients.
In any contested divorce case their will be two opinions and maybe even two sets of data. In a perfect world you could at least agree upon the data but discovery problems, stonewalling and lack of trust cause problems. So it follows that a judge hears two sides of the same story and given even less time than the attorneys had, must assimilate the knowledge imparted by both lawyers into their own understanding. Given the lack of time and the need for summary data the judge will understand even less.

The result

Ultimately a judge must then make a decision based on the testimony, evidence and legal arguments which will render some of what they learn from the lawyers to be worthless. After three days of trial and various conflicting points of view the judge is left with a microcosm of the original financial picture and they render an opinion which is ultimately turned into an order.
So, next time you are wondering about the value of information in a divorce case, do your best to keep the decisions in the hands of those who know best: the clients.

wellspring divorce advisors

Wellspring Divorce Advisors helps individuals and couples address the financial aspects of divorce in a civilized, equitable, and efficient manner by providing expert divorce financial planning and advice.

Contact us to find out how we can help you through this process.

Knowledge is Power in Financial Negotiations of Divorce

Knowledge is power  in the financial negotiations of divorce.


In most marriages one party will have taken responsibility for the management of the family finances. This is a natural by-product of economics. The fact is that one party will have a comparative advantage when it comes to managing finances either based on experience, education or efficiency. The party with the comparative advantage should take on the specific task in question in order to make best use of the family’s limited resources.


The unexpected consequence of this rational economic decision is that one party will find themselves on the outside looking in when divorce comes into the equation.


How you can take control of your divorce


One of the first and most important tasks Certified Divorce Financial Analysts undertake with clients is the gathering of information. When one party has all of the financial documents, information and knowledge the couple is not operating from a level playing field.


In amicable proceedings this is easily rectified by gathering the information through informal discovery and doing a little bit of education. In litigious cases, financial documentation and knowledge is often wielded as a weapon. The financially savvy party may make it difficult to gather documents and not be completely forthcoming with details. In this case it is necessary to pursue information through formal discovery which may include subpoenas, depositions, oral testimony and interrogatories. The formal discovery process can be the most significant cost in divorce proceedings when there is reason to believe a party has hidden or mis-appropriated assets and incomes.

The figure below details the value  of information in the negotiations of divorce financial settlements. As Financial Knowledge increases on the vertical axis, Power increases on the horizontal axis. It is extremely important to level the playing field with complete financial data gathering and expert guidance.

What are Benefits of Divorce Financial Planning?

You will learn about the ramifications of complex subjects such as separate vs. community property, valuing and dividing property, retirement and pensions, spousal and child support, the family residence, tax ramifications and insurance. You will

    • Understand the difference between separate and community property;
    • Understand how personal property, intangible and illiquid assets are valued and divided;
    • Understand Defined Contribution versus Defined Benefit plans versus Deferred Compensation plans and how they are valued and divided;
    • Understand the tax ramifications of Spousal and Child support including recapture and Child Contingency rules;
    • Understand the importance of security for support payments.

What do I Do With a Home in San Diego When I Divorce? – Part 2

The last time I posted commentary on the San Diego Real Estate Market and how it can and should effect your divorce financial planning I mentioned an estimated figure of 25% as an average discount from listing price to sales price as one of my major concerns. The next day I received an e-mail from Prudential California Realty including their recent economic analysis confirming my estimates. The table below details the average list versus sale price for all home sales closed in the $1,000,000 plus price range in San Diego County over the last two years. The figure confirms my suspicion that a 20 to 25% disconnect exists between sellers and buyers. All of the realtors I speak to say they are aware of this and suggest being aggressive on pricing. Universally they say the homes that are priced right sell quickly and often above the listing price.

So what about the time line for sales in our current market? Again thanks to Prudential we have some current inventory information. The current inventory can give you some idea of the time it might take to sell  a home in the current environment. From $1,000,000 to $1,999,999 there is an 11 month inventory of homes currently listed for sale. That means that realtors would expect it to take 11 months for all current inventory to be sold. In the $2,000,000 to $2,999,999 price range there is currently 34 months of inventory.

It is a generally accepted belief in the real estate industry that a market with more than 12 months inventory is stagnant at best. Stagnant is not a good term in the real estate business. It means prices have to come down in order to equalize supply and demand. We have too much supply and very little demand. Knock 20% discount from a $2,500,000 listing price to an estimated $2,000,000 sale price and maybe the markets free up.

Give us a call if you are faced with making a decision about what to do with the family home now that you are divorcing. It may be the biggest financial decision you make during the divorce proceedings.


Justin A. Reckers can be reached at:

Telephone: 858-509-2329