When advising a divorcing client couple, it is key to make sure each understands his or her financial accounts and whether they have access to them.

For spouses who have not been involved in the family finances during the marriage, the learning curve can be frustrating, says Eva Sachs, founder and certified divorce financial analyst with Toronto-based Women in Divorce Financial. The client might feel he or she doesn’t have control over the future, or become distracted by the larger aspects of the divorce proceedings.

These tips can help you ensure your divorcing clients handle their joint accounts correctly and fairly:

> Clarify how they should send instructions
Be very clear with clients about how they will give you instructions once they start the divorce process.

“One of the most important places to start in this conversation is to find out whether investment instructions can come from one party or must come from both parties,” says Jim Doyle, an advisor and CDFA with Investors Group Inc. in Vancouver.

If you have a relationship with both clients, you should insist that both attend meetings regarding the accounts, says Diana Shepherd, director of marketing with the Institute for Divorce Financial Analysts in Toronto. Or, at the very least, says Shepherd, who spoke at a CFA Society seminar on divorce in Toronto last week, have both clients sign off on any instructions.

“You have to stop thinking that this is a couple who are playing for the same team,” she says. “Really, they’re not any more. Their interests are not the same.”

> Explain clients’ access to accounts
Make sure clients understand which accounts they have access to, and how they can find information about their accounts.

Sometimes, if one client in the partnership didn’t participate in the finances during a marriage, that client may be unaware of his or her right to gain access to certain accounts, says Sachs. For example, Sachs has met clients who thought they could not access a joint account because they didn’t know a password for online banking.

> Don’t forget the debt
Investments and bank accounts are not the only possible joint accounts, says Doyle. Remember to talk to clients about debt, as well.

If a couple has significant amount of debt — for example, in a line of credit — make sure both sign off on any use of the credit during the divorce proceedings, he says. As well, you will want to watch the accounts during the proceedings to ensure none of the partners is using the account inappropriately.

IE