The Perspective Blog

Post-Divorce – A Fresh Start

Brad Jesson

Going through a divorce is challenging and emotionally exhausting, and the process is often time-consuming. This is especially true in affluent families where additional complexity can complicate the division of assets. It can take months or even years to arrive at a formal agreement for separation, and whether the process was amicable or contentious, there is often relief in beginning a new chapter in life. However, this new chapter can itself bring added stress given a plethora of new financial and planning decisions to consider. This can be further magnified if an individual was passive in the financial aspects of the relationship.This article provides practical examples of how Northwood Family Office has helped guide families through the implications of divorce. The information below is based on actual client situations but names and facts have been altered for privacy purposes.

Tony and Cynthia

Consider this example: Tony, at age 54, recently divorced his wife Cynthia of 22 years. Tony and Cynthia have two children in their mid-teens. Cynthia built a very successful architecture firm, while Tony primarily raised the children and helped Cynthia run aspects of the firm.As part of the settlement agreement Cynthia will be paying a lump-sum payment to Tony for his share of the equity value in the business of $35M. Cynthia will be keeping their primary home, while Tony will retain the cottage and vacation condo. The cottage and condo are higher in value, so Tony has agreed to fund the university costs for their two children. After going through the divorce and sale process, Tony is now turning the page onto the next chapter of his life.

Keeping Tony Up at Night

After a long and arduous divorce, Tony is feeling overwhelmed and fatigued. It took nearly two years from separation to settlement. Cynthia managed most of the financial aspects of the relationship and while Tony knew what was going on at a high level, he did not keep up with all the details.Tony now has three major concerns keeping him awake at night:

  1. Divorce Proceeds – Tony has $35M sitting in his bank account. He will need to buy a new primary residence and wonders if he should take out a mortgage given interest rates are so low. He also has no idea how much he can afford for a new home, how to invest the remaining funds, or whether the funds will last for the rest of his life, especially given his desire to help his kids and engage in philanthropy.
  2. Lack of Knowledge – Tony feels general discomfort in having so little investing and tax knowledge and experience. He would like to understand how and why his investments perform and the inherent risks, and how he should think about funding his expenses in the most efficient manner moving forward. He was not involved with any of the tax planning or compliance aspects in his marriage but would like to better understand how he can minimize the overall tax burden over the long term.
  3. Protecting Himself – At 54, Tony feels like life still has so much to offer. He would like to eventually find a new long-term partner to share his life with. Tony has concerns that his wealth will bring complexity around a new relationship and would like to understand what steps are required now and, in the future, to protect himself and his children.

Choosing a Family Office

Given the complexities, Tony’s lawyer recommended he consider a multi-family office (MFO), one which would be able to take a holistic approach and consider all factors involved in financial planning. Tony selected a multi-family office and after working together for a year, he reflects on how the group was able to help address his major concerns and address others he hadn’t considered.

  1. Divorce Proceeds – After understanding and quantifying Tony’s new goals and objectives, the MFO developed cash flow projections. This analysis helped him gain a deeper understanding of how financial decisions made today and in the future will impact his ability to meet his financial goals and objectives. Based on the projections, a diversified asset mix for his portfolio was developed and investment managers selected. An investment implementation plan was agreed up with a cash flow structure built in to fund the new home and monthly expenses. The optimal tax structure was also considered and put into place.
  2. Lack of Knowledge – Tony now has some basic knowledge about different asset classes and the features of each (i.e. expected returns, risk, liquidity).. He looks forward to understanding how the portfolio will function and how various asset managers invest, but he understands this will take time. In terms of tax and other knowledge, Tony now grasps the basics of the Canadian taxation system and why his tax structure has been put in place. With the assistance of his family office, he feels that everything possible has been done to optimize the tax structure.
  4. Protecting Himself – Tony’s new family office reviewed the high-level financial risks of entering a new relationship and the things to consider well ahead of time to avoid awkward discussions with new partners. Tony feels comfortable in knowing “when he might cross the line” is when it comes to entering a new relationship and should take steps to protect himself and his children.


The reset that comes with divorce can be daunting and it can make you feel vulnerable. It can also seem as though the “to do” list is endless. A family office, utilizing goals-based planning, can help guide a divorced client through the clutter to arrive at a holistic financial plan. With some effective planning and guidance, a fresh start and peace of mind are achievable.


Brad Jesson

Brad is a member of Northwood’s family office advisory group, working with families in the areas of goals based financial planning, investment management, tax planning, and next-generation education. In addition to his work with families, Brad is actively involved with Northwood next generation education and regularly contributes to Northwood's Thought Leadership Newsletter.

Read More