Divorce is often a painful experience, particularly because the process often requires negotiation between two people who are upset with each other. Heightened emotions and a poor relationship history can make reaching a financial settlement particularly stressful.
Settling financials in a divorce
Coming to a fair and equitable division of assets is not always a straightforward process. It is one thing to negotiate each spouse’s share of bank accounts or the proceeds from the sale of a home. Determining what share a spouse has in the other’s retirement plan is a more complex issue as is dividing debt accumulated during the marriage. Selling and dividing assets can also have tax implications that both of you will need to reckon with.
Ways that CDFAs can help
A certified divorce financial analyst is a financial professional who has completed additional training to become certified as a specialist in divorce financial planning. This expertise can be critical, even if you already have a financial advisor who you trust.
CDFAs understand the complexities of divorce-affected finances and might help you and your spouse understand your financial situation and what each spouse may reasonably expect in a settlement. They may also be able to assist in developing strategies that can minimize tax consequences while also helping you rebuild your financial health after your divorce.
Hiring a CDFA is not always necessary, particularly if you and your spouse have few assets. If you and your spouse do have assets, investments, or substantial marital debt, however, a CDFA may be able to help you and your spouse reach a fair resolution on financial matters and can help you get a better picture of your post-divorce financials.