Divorce and Money

Tackling the Big Issues:  Divorce and Money

It doesn’t matter whether you and your spouse are worth $50,000 or $50 million, deciding what to do about the assets and debts from your marriage and resolving other money-related matters is a very important part of your divorce. The advice and assistance of the collaborative financial professional in your divorce will be extremely valuable when you are making those decisions. A collaborative financial professional can help you and your spouse (with legal advice from attorneys) make informed financial decisions. Almost all of these decisions have short- and long-term impact on your future financial stability. Some of the most important are:

  • Dividing the assets from your marriage, including the marital home. Deciding if one party will keep the marital home or if it will be sold (or some combination of plans) is often an emotional subject. This decision will have a great impact on the future financial stability of the restructured family. Collaborative Financial Professionals can provide unbiased information on the implications of either of the parties maintaining the home after a divorce. Or, Collaborative Financial Professionals can help the parties determine an “affordability” range for their future homes. Your Collaborative Financial Professional can also give you some common sense input about which assets may be easiest to transfer between spouses as part of a divorce.
  • Dividing the debts from your marriage. The more debts you owe, the more challenging it is to ensure that you aren’t liable for your ex-spouse’s debts after a divorce. The Collaborative financial professional can offer some options to minimize this possibility.
  • Meeting your children’s financial needs. A thoughtful plan at the time of divorce for meeting your children’s expenses will minimize the potential for future conflict.
  • Providing insurance for the parties and children after divorce. In many cases, one spouse has employer-provided health insurance covering the entire family. It is often helpful to review the available options to determine what makes the most financial and practical sense for health insurance going forward for both the former spouses and the children. In addition, life insurance policies can often provide post-divorce security for children if either of the parties dies.

What do Financial Neutrals do on the Collaborative team?

A neutral financial professional is a licensed Certified Public Accountants (CPA) and Certified Divorce Financial Analyst (CDFA) who helps you to make informed decision about your financial future. The financial neutral will gather, organize and help you understand the financial information relating to your divorce. Financial professionals are trained in the collaborative divorce process and joins the collaborative team as neutrals – they will not be on your side or your spouse’s side. Their role is to help you understand enough about your finances to make informed decisions. The neutral Collaborative financial professional can help you and your spouse:

  • Gather and organize required financial information
  • Verify information about your estate
  • Develop realistic financial goals for the future
  • Become educated about financial matters related to the divorce
  • Prepare future household cash-flow plans and projections
  • Prepare plans to meet current and future expenses for children
  • Develop settlement options and analyze the pros and cons of different ways to resolve the financial aspects of your case
  • Provide specialized tax calculations and analysis
  • Identify separate-property or other financial claims
  • Help with placing values on businesses, real property or other assets of the marital estate
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