If you are facing separation or divorce, you may benefit from some inside advice about how to proceed. You probably anticipate, and I recommend, securing the advice and counsel of a proven, certified family law divorce attorney. However, you may also want to consider seeking the expertise of a certified divorce financial analyst (CDFA), and here is why.
Most divorce attorneys, with the help of their in-house teams, offer clients a review of assets and debts in an effort to help them determine a settlement proposal. Yet, the majority of attorneys and their staffs do not typically have specific training with regard to financial issues. And let’s face it, today’s financial landscape for most couples and individuals can be complex.
For example, a dollar of value in the family home doesn’t necessarily translate equally to a dollar in a pension plan. While homes provide shelter, they also require maintenance. A pension may not provide any benefit until age 65. Evaluating assets from all angles is important.
If you and your spouse have 401(k) accounts, pension plans, stocks and bonds, a home or second home, valuable personal belongings, real estate, stock options, a family business or other investments, calculating the short-term and long-term value of these assets, and how to divide them fairly and equitably, takes financial knowledge and expertise. There are also tax benefits and liabilities to consider.
CDFAs are specially trained in the areas of divorce laws, financial planning, budgeting and tax laws with regard to divorce. Many are also divorce mediators.
Did you know?
• The division of marital property in Texas is rarely 50/50;
• Custodial parents of minor children may want to stay in the family home for their benefit and continued stability, but it may not be financially feasible;
• Determining which assets and debts are legally “separate property” and which are “community property” sometimes surprises couples;
• Calculating the “community interest” in a spouse’s pension plan in today’s dollars is important in a fair settlement;
• Finding all the assets and debts of both spouses can be difficult and often requires specialized financial skills or know-how;
• Continued health care coverage for both spouses and minor children should be factored into the settlement;
• While Texas doesn’t have mandatory alimony in most cases, there are provisions for “spousal maintenance” in certain situations.
According to Michigan Family Court Judge Kathleen M. McCarthy, CDFAs she has worked with provide invaluable short-term and long-term analysis of each couples’ financial situation with regard to property divisions, spousal support and debt retirement, giving her vital facts necessary to make fair and informed decisions.
“CDFAs often provide visual aids in the form of charts, graphs and spread sheets, which make all the calculations and projections easily understandable,” she says. “This provides invaluable information that allows the court to arrive at a fair, equitable and just resolution – not only at the moment of trial, but down the road as well.”
Couples are often baffled by the divorce process and even more confused by the financial aspects of the settlement agreement. CFDAs can help take the mystery out of the numbers and assist spouses avoid long-term financial pitfalls of an inequitable settlement.
Many couples can also benefit from developing a post-divorce budget with the help of a CFDA, thinking through income levels and monthly expenses, before a settlement proposal is developed or accepted.
Involving a CDFA early in the process can also save couples time and money. With mediation now being required in divorce cases by Texas family law courts, CDFAs can help attorneys and spouses reach equitable and fair settlement agreements, avoiding court altogether.
For more information on how a CDFA can help you, visit www.lifetimeplanning.cc.