Moves likely to help Tiger’s wife hit the green

It’s too soon to tell if Elin Nordegren Woods and Tiger Woods will be able to repair their marriage, but advisers say Ms. Woods is taking control of her financial situation — an important step whether the marriage survives or not.
Her decision last week to purchase a $2 million house in Sweden is fueling speculation that she may be preparing to file for divorce, according to published reports. She’s also reportedly considering bolstering her prenuptial agreement.
Advisers say there are a whole host of financial steps they urge their clients to take before they file for divorce, including educating themselves on the household’s finances, as well as looking into additional housing and changing beneficiaries on life insurance plans.
While they often encourage clients to hold off a few months on buying a house because of the emotions involved, advisers say it’s paramount that spouses become educated about the couple’s household finances. Too often, if there are secrets in the marriage such as marital affairs, there will likely be secrets involving the household finances as well.
“Honesty in a marriage extends to finances,” said Greg Merlino, an adviser with Ameriway Financial Services Inc., which manages about $75 million in assets. “Unfortunately, when you have significant wealth, it’s not unusual that one spouse is left in the dark about the family’s finances by design.”
Often, wives may not know about pensions, retirement accounts, deferred compensation and stock options. Once they have this information, then they can make informed decisions based on facts and not emotions, Mr. Merlino said.
“First and foremost, I tell them they need to separate their emotions. You need to separate anger and guilt,” he said. “Decisions based on emotions rarely make much sense.”
Mr. Merlino encourages wives to build an emergency fund, and also to look carefully at their credit rating. Some wives don’t have a good credit history simply because the husband’s name is on all of the accounts, he added.
Mr. Merlino said beneficiary documents for life insurance policies can often be changed without requiring signatures from the spouse. However, in company-sponsored retirement accounts if a spouse is not the beneficiary, he or she often must sign a statement saying they understand that.
One of the most important things a spouse can do when considering a divorce is to his or her their own team of advisers separate from the individuals the couples uses, said Leslie Thompson, an adviser, co-founder and partner of Spectrum Management Group, which is affiliated with Raymond James & Associates Inc. She also holds the designation of certified divorce financial analyst.
She said that her biggest challenge as an adviser in these circumstances is helping spouses understand how much of the household wealth is readily available. For instance, if a spouse is a real estate developer, the equity and cash on hand will likely be low in this economy, and therefore her clients may decide to hold off filing for divorce.
“The cash flow just may not be there,” Ms. Thompson said. “If the assets are $10 million and you think it is $10 million in cash, but it may not all be liquid.”
She said that all spouses should have a better understanding of finances — regardless of the state of the marriage.
“Even if the marriage is good, they need to know what they have and what’s out there,” she said. “You should always have an inventory of assets.”

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