Divorce: How to Keep Your Money

As soon as you begin to contemplate divorce, the nauseating, panic-attack-inducing realization of losing half of your net worth and then having to figure out how to manage it all kicks in and you find yourself wondering if it’s even worth it to consider leaving if you’re just going to end up broke and starving.

There are ways to ensure that your financial future is not destined for disaster. First and foremost, be sure you involve a financial advisor that specializes in divorce, a Certified Divorce Financial Analyst® to be precise, on your team so that you will be fully informed of all the creative settlement possibilities that may be open to you.

A couple married 24 years were referred together to a colleague for assistance with their divorce. They had gone to an attorney together and were completely amicable. The attorney made it clear that he could only do their document preparation since he was ethically bound to represent only one party. That was ok, but they asked how they would determine their property division. He responded, “This is a community property state so we’ll just divide each asset and each debt exactly 50/50.”  The couple just didn’t feel like that was the smart thing to do. They were referred to the CDFA®, Certified Divorce Financial Analyst®, to explore options.

After gathering all of their financial documents and completing the analysis, the CDFA® put together two reports for the clients. The first reflected an exact 50/50 split as the attorney had suggested. The second was a creative settlement solution that also resulted in a net 50/50 split but took into consideration tax planning and consequences as well as the needs of each party as they planned for the next phase of their lives. One of the most crucial pieces that is often left out of negotiation talks is finding out what each party needs to be okay post-divorce. This step requires a financial advisor who understands the importance of forward planning and can identify those creative solutions that considers taxes and the desires both short term and long term of each party.

This couple had less than $800k in total net worth and the creative settlement solution resulted in an additional $20,000 EACH to their bottom line just because some financial intelligence was used to determine their settlement. That’s real money!  Needless to say, the couple was thrilled knowing that they saved $40,000!

Don’t go into this blind. There are so many ways to ensure that both of you get to keep more of your own money and that you negotiate for the money that is right for your situation and your needs. Get the right experts on your team.  We’d love to help you!  Call us today.

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Creating a Fair Divorce Settlement

As soon as you decide that divorce is a potential reality, immediately your thoughts will turn to your future and fears of your new reality. “I can’t support myself.” “I haven’t worked in 20+ years.” Or “How much of my income will I have to give up supporting my spouse and the kids?” “I’ll be living in poverty!”  A world of unknowns reveals itself in an avalanche of financial and emotional realities that must be dealt with. Despite the stereotypes around vindictive nasty divorces, my experience is that many couples truly and sincerely want what’s fair for all involved.

The problem here is that every person’s idea of fair is different. Depending on how much emotional wounding may have happened in the marriage, perceived wrongs that demand to be righted, apologies that remained unspoken, “fair” may be on the peaks of two separate mountains cut deeply by a river of conflict and resentments. This is the simple truth that has created a multi-billion-dollar divorce industry. I think there is a different answer.

What if you let go of the need for fairness? I know, sounds crazy but try this on for size. What if each party didn’t worry about what the other person was getting and sat down with a Certified Divorce Financial Analyst® and simply figured out what they need for themselves to be able to be ok? You may find that what’s important is not getting everything equal but keeping certain things that are important to you. Consider this example, what if everything up for division could be depicted by a jar of marbles. You may find that you really care less about receiving the exact same number of marbles because what you really want are all the green marbles or all the small marbles and your spouse wants all the red marbles. Now coming to the table can look a lot different. Now, consider that you sit down with a mediator and start there? Maybe it’s not exactly equal. Maybe it’s not “fair” but it’s creative. Maybe it just works! For everyone involved! Now that is a win/win solution!

Focus on the next phase of your life and how you can move on in a healthy happy way that will preserve your family unit for the future. My goal is to help you be the best divorced family you can be, because you’re still a family.

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