Divorce consumes every aspect of your life: emotional, familial, social, spiritual, legal, and financial. It generates emotions that are often conflicting and intense. In divorce, expect upheaval in virtually every area of your life.
That’s why one of the best things you can do to keep your emotions from overwhelming the situation is to maintain focus on the financial challenges the divorce process presents. The decisions you make today will set your financial tone well into the future. That’s why in addition to qualified legal counsel, it’s critical you seek qualified financial counsel: a Certified Divorce Financial Analyst.
By working closely with your attorney, an experienced CDFA can help secure your financial interests, not only in the short term, but also in the long-term where it matters most. A CDFA is not a financial advisor or planner, a stockbroker, a CPA, or an accountant. A CDFA is a specialized financial professional who helps clients successfully navigate the specific financial complexities inherent in the divorce process.
The most common contributors to financial turbulence during divorce are a lack of adequate preparation, not being properly informed, and giving inadequate attention to the long term. Family finances always demand careful attention in what has become a volatile, unpredictable economic environment. This is most especially true during the divorce process.
It is critical to immediately focus on developing a solid strategy to ensure you emerge from the process in the best possible financial and emotional shape. Should you cash-out assets to get a clearer picture of the marital portfolio, or hold off until they regain appreciable value? An experienced CDFA will help you take stock of all marital assets including retirement investments, pensions, real estate, life insurance, annuities, stock options, deferred compensation, accrued vacation time, even airline frequent flyer accounts and country and health club memberships. They will help you assess what you owe in debts and liabilities, and get a handle on expenses.
An experienced CDFA will clarify distinctions between separate property (possessions before marriage, inheritances, gifts from those other than your spouse, family heirlooms), and marital property (anything acquired during the marriage). They can assist you in exploring possible hidden income streams, assets, safe deposit boxes, and liabilities, and make you aware of what you may be entitled to, and obligated for.
They can help you understand the true worth of specific marital assets. For example, to assess the true long-term value a $500,000 home that is paid-off, costs such as property and capital gains taxes, maintenance, and utilities must be factored in. A CDFA can also help you fully evaluate your settlement options, and determine how various income and tax consequences may factor in to each scenario.
Remember: in divorce, final decisions have long-term consequences. There are no re-dos. What seems like a great deal now may turn out to be a financial fiasco 15 years out. Work with your Certified Divorce Financial Analyst to make a full assessment of each option to make the most successful choices in both the short and long terms. During divorce, it’s crucial to maintain focus on the most important outcome: a safe and secure financial future.
If you have any questions or would like to schedule an appointment, please call us at (972) 473-4700.