Why working with a financial planner in divorce makes a big difference
My purpose, each time I sit down with an individual facing divorce, is to make the financial planning process more accessible. This is an emotionally difficult and yet financially critical time in your life. My role is to provide clarity during the process, and put you in control of your future.
The divorce process presents an ideal time to organize your financial life. There are two reasons. First, you’ll need to disclose all assets, incomes and expenses to your spouse, and compare what they have disclosed as well. Second, your post-divorce lifestyle will be different and you need to be prepared for any challenges that arise. Doing this planning now puts you in control of a situation where you feel completely helpless, and can help reduce emotional stress.
Dealing with finances in divorce doesn’t have to be overwhelming or complicated, but it does need to be thorough.
When divorce is inevitable, making the right financial decisions is critical. However, lack of financial knowledge frequently drives people to agree to a divorce settlement they may not fully understand or may regret in the future. Once a divorce settlement has been signed, it is very difficult to change it.We help clients understand the long-term effects of their divorce settlement. Decisions made during a divorce are often the result of legal negotiations that take place at a time when emotions are at an all-time high. One of the most difficult things to deal with when going through a divorce is separating these emotions from the task at hand.
Most lawyers have working knowledge of assets, investments and liabilities, but you need to understand more than that. You need someone who can explain these concepts to you, and help you get to your goal.
During the divorce process:
How will this divorce affect me financially? This is the most common question that you will ponder throughout this process. Those who are facing divorce are unaware of the outcome of their financial security by the settlement they accept. Settlements that may look reasonable and equitable have tendencies not to remain that way over time. What’s missing in the majority of divorce cases is a qualified financial professional, skilled in pre divorce planning issues, to help you prevent inequitable financial settlements. While Attorneys play a crucial role in the process of divorce, they usually are not trained in the intricate financial details that concern tax issues, IRS rulings, capital gains, dividing pensions, stock options etc. We provide the financial expertise and guidance necessary to help you, and your Attorney, understand these issues, develop creative settlement solutions and evaluate the short and long-term financial impact the settlement will have on you. I provide our clients with powerful case exhibits in the form of spreadsheets, graphs and personal financial analysis to show various financial outcomes.
I assist you throughout your divorce case and address your concerns:
How will I survive financially?
What does it mean if I accept this settlement?
Can I afford the house? Should I sell the house?
What about our retirement accounts?
What tax liabilities will I be incurring?
How much support will I receive?
Will I have to go back to work?
How will this affect my retirement?
After the divorce
You need to retitle or transfer assets into your name per the final decree. Any real estate holdings, IRAs, 401k plans (needs a QDRO), stock option plans, bank accounts or business holdings, 529 plans, and life insurance needs to be transitioned to you.
Beneficiaries on all accounts need to be checked to make sure the ex-spouse does not regain split assets.
Estate planning may come in to play. Estate planning is the transfer of wealth from one generation to the next. Most families have an estate plan that is specific to their marital situation. Once that changes, the estate plan needs to be rewritten to be sure it follows your new wishes. This includes a new trust that’s tied to your social security number or a tax ID number, new successor trustee(s), new beneficiaries, new Powers of Attorney etc.
Revisit your tax situation. What is your filing status? How did the divorce affect your ability to deduct certain items? Do your income streams need to be adjusted for efficient withholding allowances?
Health Insurance- you may be COBRA eligible, but is that the best option? Can you obtain a plan through work, or do you need a personal plan?
Budgeting and putting it all together- Now is the time for you to plan for what your future look like. To take control.
What are you passionate about?
How can my divorce create a launchpad for the rest of my life?
Will I be able to retire?
Second Saturday offers non-biased financial, emotional and legal information from qualified local professionals, providing people with the knowledge, support, resources and trust that they need to survive the divorce process and move forward with confidence toward a new life.
Workshops are every second Saturday of the month from 9am-12pm- registration at 8:45am.