03 Feb Should I See a Certified Divorce Financial Analyst Before Getting Divorced?
Should I See a Certified Divorce Financial Analyst Before Getting Divorced?
Divorce can be an emotionally and financially challenging process. Consulting with a Certified Divorce Financial Analyst (CDFA) is crucial to ensure a smooth and secure future post-divorce. This article will explain why seeking financial guidance before divorce is necessary and how a financial advisor can help.
Understanding the Need
Divorce can be costly, and it’s essential to be prepared mentally and financially before embarking on the process. A CDFA can provide the necessary preparation and peace of mind. They can help you understand the complex financial aspects of divorce, such as determining which assets will be divided and how your monthly budget will change post-divorce. Moreover, a CDFA can help you estimate the costs associated with divorces, such as legal fees, mediation fees, and other miscellaneous expenses. These costs can add up quickly, and it’s essential to be aware before making any decisions.
The Importance of Preparation
Rushing through the divorce process may seem appealing, but preparing and planning are crucial. Keeping track of your expenses and income after separation will provide a more accurate picture of your financial future post-divorce. A CDFA can help you understand the potential decrease in household income, the division of savings and investment accounts, and the impact on your monthly expenses. They can also help you determine how your assets, debts, and retirement accounts will be divided and advise you on protecting your financial interests during the divorce process.
How a Certified Divorce Financial Analyst Can Help
A Certified Divorce Financial Analyst well-versed in financial regulations can help you avoid missing important details and ease the financial stress of divorce. While often the goal is to split assets 50/50, this may not apply to all assets (e.g., house, pension, 401k, IRA, vested or unvested stock). A CDFA can calculate pre- and post-tax values to help both parties understand their worth.
Your advisor can help you understand your options for dividing assets and debts, including the benefits and drawbacks of each option. Your CDFA can calculate the value of retirement plans, including old-fashioned pensions that require actuarial computations and plans with a separate (premarital) and community (during marriage) portion. They can also calculate the value of stock options and other equity compensations and explain their inclusion in child and spousal support calculations. By providing your advisor with financial documents such as bank accounts, loans, and credit card statements, they can create a financial outlook and plan for you while helping to avoid costly mistakes.
A CDFA can also help you organize your asset, debt, and income disclosure process, especially if you have complicated assets or struggle with finances. They can help ensure that all assets are accurately accounted for and that you don’t miss any critical details.
Depending on your situation and circumstances, it might be recommended to obtain your advisor independently from your spouse. Objectivity is crucial in divorce, and an advisor who has helped you and your spouse in the past may have difficulty remaining unbiased. Sharing an advisor can lead to mistakes and complications that are better avoided. An independent CDFA can provide objective advice and a neutral perspective, which can be invaluable during a divorce.
Preparing for the Future
In addition to helping you navigate the financial aspects of divorce, a CDFA can help you prepare for your future financial goals. They can help you create a budget that fits your new lifestyle, advise how to save for retirement, and suggest ways to rebuild your credit if necessary. They can also help you understand the impact of divorce on your long-term financial goals and help you plan to achieve them.
A Certified Divorce Financial Analyst during divorce can be beneficial and assist with divorce paperwork and filing procedures. Consulting with an advisor before divorce is essential to a smooth and secure financial future. With the help of a CDFA, you can understand the complex financial aspects of divorce and ensure that everything is taken care of in the best possible way. Contact Guideway Legal today to schedule an appointment and start your journey toward financial stability post-divorce.