Divorce Financial Planning
Becoming a Financial Victim
If you suspect that your spouse is planning a divorce, make copies
of all important financial records such as account statements (savings,
stockbroker, real estate partnership) and data that relates to your
marital life style (checking accounts, charge card statements, tax
returns). If you believe that your spouse may liquidate or re-title
marital assets, notify the holder in writing and get a restraining
order from the court. Watch out for cash in joint checking, brokerage
accounts or cash value of life insurance. If assets are taken, legal
and forensic accounting fees could become excessive.
Not Considering Mediation
If assets are moderate, joint custody
is workable and your spouse is agreeable to a fair settlement, mediation
will save thousands of dollars in legal fees, emotional aggravation
and provide more flexibility then the adversarial legal process.
Mediation is a bomb when one spouse is hiding assets or income or
is unwilling to consider the needs of the other.
Hiring a Combative Lawyer to
Punish Your Spouse
This is a very bad idea for two reasons.
First, except in extremely egregious cases, divorce settlements
are determined by equitable distribution laws and courts will not
punish your ex-spouse financially for being a bad person. Second,
your attorney assumes carte blanche to increase hours spent on your
case. High divorce costs mean less money will be leftover for living.
Treat divorce as a business arrangement and get your revenge by
living well post-divorce. (Click
here to continue)
Traditionally, financial planners work with individuals at the
conclusion of the legal process. However, financial planners with
additional training in the financial, tax and emotional issues of
divorce (Divorce Financial Planners) can be extremely valuable during
the divorce process.
Financial planning provides a structured approach to the analysis
of an individual or family’s total financial picture. Divorce
Financial Planners integrate the proven methodology of financial
planning directly into the divorce process.
The financial planning process begins with gathering of data and
coordination of financial information with other professionals such
as stockbrokers and business accountants to produce a complete analysis
of the current financial position. The resulting report includes
budgeting and expense management, income tax, insurance, employee
benefits, assets and liabilities, investments, retirement planning,
educational planning and estate planning. (Click
here to continue)
The use of financial planners in the
divorce process is relatively new, but is a rapidly growing trend.
The reasons for this are simple. The divorce process involves to
a large extent the untangling and subsequent division of assets
and income. Despite a lack of formal training in personal finance,
attorneys and mediators have historically been thrust into the roles
of financial analyst and adviser. This has been an area fraught
with danger, both from the divorce professional’s and the
client’s point of view. While accountants and actuaries have
participated in the process, their services have usually focused
on the valuation or investigation of assets, not on personal finance.
here to continue)
Divorcing clients need to make important
economic decisions as they go through the process. If they make
bad decisions, they will more than likely have to live with the
consequences of those decisions, and these can be financially and
emotionally devastating. Since there are serious pitfalls and difficult
decisions to be made, people going through divorce need expert financial
advice. While they have traditionally relied on the attorney or
the mediator to provide such advice, and while many mediators and
attorneys have come to accept this role, the requisite financial
knowledge and skills are often outside their areas of training and
expertise. This can potentially lead to problems. (Click
here to continue)
In divorce financial planning, the principles and methods of traditional
financial planning are applied to divorce. These include collecting,
clarifying and analyzing data; studying this data in a long-term
economic context; evaluating the financial viability of alternative
settlement scenarios; conducting periodic monitoring and recommending
modifications when post-divorce circumstances or changes in financial
goals so dictate.
When applied to divorce, financial planning can help individuals
stay focused, work more productively with their attorney or mediator,
develop a better understanding of short- and long-term needs and
paying abilities, make smarter financial decisions, avoid costly
and often irreversible mistakes, avoid emotionally driven outcomes,
analyze alternative outcomes and arrive at agreements that are fair
and workable and avoid letting potentially workable outcomes go
bad. (Click here to continue)
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of the information, opinions or other content posted on the site. It is not
intended as a substitute for and should not be relied upon as legal, financial,
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relationship. The applicability of legal principles is subject to amendment by
the legislature, interpretation by the courts and different application by
different judges and may differ substantially in individual situations or
different states. Before acting on what you have read, it is important to obtain
appropriate professional advice about your particular situation and facts.
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