What is a Divorce Financial Professional (and Do I Need One)?

Divorce is a legal process, but there are many other aspects to divorce as well: social, emotional, and, of course, financial. For most people, divorce financial issues are a source of great stress—whether that person is worried about having enough money to live on following divorce, or is concerned about how to divide complex assets in a high net worth divorce. These can be very legitimate and distressing concerns for those who are not quite so familiar with family finances.

Depending on the nature of your concerns, having a divorce financial professional as a part of your divorce team can provide you peace of mind during the divorce process, and lead to a better outcome following divorce. “Divorce financial professional” is an umbrella term that refers to any financial services provider who concentrates on financial issues related to a divorce.

A divorce financial professional may have a background as an accountant, financial advisor, or financial planner. Sometimes the term is used interchangeably with “divorce financial advisor.” Often, however, a divorce financial advisor plays a more narrow role than does a divorce financial professional. A divorce financial advisor focuses exclusively on creating personalized financial strategies for divorce and its aftermath.

Anyone who refers to themselves as a divorce financial professional needs to have some special training or experience working with divorcing couples. For example, a Certified Divorce Financial Analyst (CDFA) has received education and certification from the Institute for Divorce Financial Analysts. If you are considering working with a divorce financial professional, it’s a good idea to inquire into their specific credentials, especially if you are not relying on a referral from a professional you trust.

Why Work with a Divorce Financial Professional?

Think of your divorce as a construction project, with your attorney in the role of the general contractor. The project will be completed better, and more cost-effectively, when people who are best equipped to perform various aspects of the work are in place.

You wouldn’t expect your family law attorney to act as your therapist, even though your attorney knows some things related to the emotional aspects of divorce. You receive better insights, likely at a lower cost, from someone who is specifically trained and certified as a therapist. Similarly, your attorney can guide you generally regarding certain financial aspects of divorce, but for in-depth financial guidance, a divorce financial professional is the right choice—especially when there are complex issues (like ownership of a business) in your matter. However, and as a general rule, most people can benefit from the assistance of a financial advisor during a divorce.

In most marriages, one spouse tends to take the lead on financial issues, while the other tends to rely upon them to do so. If you were the less financially involved spouse, a professional can help you get your financial footing so that you will make sound financial decisions during your divorce, and manage your finances well afterward.

How Does a Divorce Financial Professional Help?

Certainly, divorce impacts your financial future. A divorce financial professional will help you to understand exactly those impacts so that you can make evidence-based, rather than emotionally-based, financial decisions. And when it comes to finances during divorce, you need your decisions to be well-reasoned and rational.

Depending on the training of your financial professional, and upon your specific needs, your professional may assist you with some or all of the following:

• Understanding your current income and expenses, as well as your likely income and expenses following divorce
• Understanding whether you will need spousal support (also known as alimony), and how much you will realistically need to meet anticipated expenses
• If you want to remain in the marital home after your divorce, helping you figure out whether you can reasonably afford to do so
• Organizing and interpreting financial data that may be a relevant consideration in resolving your divorce
• Advising you regarding the valuation of complex assets such as a business during divorce
• Analyzing financial records regarding marital income, marital assets, and marital debt
• Developing a reasonable financial budget for during and after divorce
• Helping you understand the long- and short-term impacts of various options for dividing marital property, including the tax implications of a desired division
• Identifying future financial goals, including retirement goals
• Evaluating your changing insurance needs
• Providing guidance regarding protecting your credit score during and after divorce

In short, a qualified financial professional can help you make better financial decisions during the divorce process, and help you feel more confident moving into the next phase of your life.

Who Needs to Work with a Financial Professional?

Almost anyone going through a divorce can benefit from working with a financial professional. For instance, if your spouse has always managed the finances, an experienced financial professional can help you improve your financial literacy and develop a reasonable budget so that you will be able to stand on your own two feet financially.

That said, certain people need the help of a divorce financial professional more than others do. You should strongly consider working with a divorce financial professional if:

• You or your spouse own a business
• You are in a high net-worth marriage
• You suspect your spouse has concealed or dissipated marital assets
• Your marital estate includes multiple income sources or complex investment portfolios
• You have significant retirement plans or pensions that need to be divided in a way that both preserves their value and complies with ERISA requirements
• You or your spouse have variable or uncertain income and need help creating a budget based on projected future income
• You are concerned about the tax implications of your divorce settlement
• You have been unable to reach a settlement and your divorce will go to trial

People with fewer assets or shorter-term marriages may not necessarily need a divorce financial professional’s help. Regardless of your circumstances, however, if you feel like you could benefit from extra financial guidance during your divorce, a professional’s help is worth considering.

How Do I Find a Divorce Financial Professional?

The best way to find a trustworthy financial professional to work with in divorce is to speak with your trusted “general contractor”–your divorce attorney. Your experienced attorney will be able to help you identify the specific issues with which you need a divorce financial professional’s help, and which type(s) of divorce financial expert may be best suited to your needs. An attorney who regularly works with such professionals will steer you to someone that both you, and the court, can trust.

To learn more about divorce financial advisors and analysts, contact Strickler, Platnick & Hatfield to schedule a consultation.