Do you Need A Financial Plan When Going through a Divorce?

With a short answer, yes. Even in normal circumstances, financial planning for your future is a key component to your family ensuring long-term financial sufficiency. However, when you are going through or have completed a divorce, financial planning in light of the current circumstances is even more crucial. For many people, their long-term and short-term financial goals will change significantly in light of their changed marital or family status and given the changes in their lives, it is more important than ever to ensure you have trusted advisors guiding you through decisions about your financial well-being and future. In order to ensure you can make the best decisions about your future, you need to make sure you understand the options, the risks and benefits and what is at stake for yourself and your family.

While your experienced family law attorney will guide you through the process of fairly dividing up your assets, it is equally as important that you have a professional available to ensure that the outcome of the family law litigation aligns with your financial goals and objectives as you move forward toward your new life!

What is Divorce Financial Planning?

This is financial planning that focuses on developing your personal business and financial goals in light of and, when possible, concurrently with the divorce settlement to ensure that your family law legal professional is seeking a settlement or court-tried outcome that benefits and aligns with your ultimate financial goals and strategies. By ensuring you understand the best possible outcome for your future, you can allow your family law attorney to guide the asset division with the understanding of your ultimate financial goals in place.

Who Should I involve in Assisting with Divorce Financial Planning?

Often a divorce financial advisor can provide considerable assistance to your team. Generally, a divorce financial advisor will have qualifications such as a Certified Divorce Financial Analyst (CDFA) and hopefully, someone who also has a Certified Financial Planner (CFP) designation. A CFP designation is a generalized designation for knowledge in financial planning for all people and a CDFA is someone with a specialized designation in helping to process and understand the unique needs of someone going through and completing a divorce or other change in life circumstances.

In certain kinds of specialized and unique situations, your divorce attorney may also suggest or recommend specialized divorce financial analysts. Some such people who may be needed in unique situations include a Chartered Business Valuator (CBV), a Certified Fraud Examiner (CFE), a Certified Valuation Analyst (CVA) and other highly trained and credentialed financial experts. Working with a divorce or family law attorney who is knowledgeable about the kind of specialized expertise that your case requires will result in a better, more fact-based result in your case, generally with less associated costs (as turning over a part of the work in your divorce case to an expert often results in them being able to complete the needed analysis and provide information more cost-effectively than someone less familiar with the specific, specialized knowledge needed).

What Information Will I need to Gather and Provide to Work with Financial Experts?

For the divorce process, regardless of whether you are going through a divorce in Kansas or Missouri, you will need to make a full financial disclosure of all assets and debts. This generally occurs in the initial beginning stage of the case and updates/supplements will be needed as or when there are significant changes in your financial situation during the course of the case. Each spouse needs to disclose their respective sources of income, investments, real estate/real property, any mortgages or debts that exist, their tax returns, expenses and other similar information. This information, required for the divorce case process, is generally similar information that a divorce financial planner will require to learn about your financial situation and provide the best possible options for you and your situation. If you do not provide a full and accurate disclosure, your financial planner cannot develop the best possible plan for you and your situation.

How Else Can A Financial Planner Help in a Divorce or Other Family Law Situation?

A certified divorce financial planner can also assist you with determining realistic needs for maintenance and child support purposes. Of course, your family law attorney will assist with this, as well, but again, you may be able to substantially reduce the costs of your litigation if you are able to provide your family law attorney pointed, organized information about your financial needs and expenses, particularly if you or your family or children have unique and outside of the ordinary expenses or needs.